Practice Management July 3, 2023

Best Practices for Scaling a Retirement Advisory Firm

Growing a practice isn’t easy, especially amid a tight labor market. What are some best practices in growing a retirement advisory team in the right way?
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Art by Alfonso de Anda


The retirement plan adviser landscape is in need of newcomers who can both support and eventually replace the old guard, according to industry participants. But how can advisers best build their practices amid a tight labor market across many sectors in an industry that is both specialized, and heavily regulated?

The demand for recruiting retirement advisers is at an all-time high, says. The need for advisers has grown dramatically as more plans come online in the U.S., issues like coverage gaps remain, and big firms seek to keep and retain talent, says Chuck Williams, CEO of Finspire.

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Williams has taught a course on corporate retirement plans and employee benefits for 17 years at Northwestern University. He tells his students that there has never been a greater need for advisers than right now.

“As you go to most of our conferences people are my age [or] older, which are mid 50s and older. A lot of them are retiring or they’ve sold a practice, so the demand has never been greater,” says Williams. “There is a definite focus now on getting younger people into this industry and getting [people] from different backgrounds. In my classroom [it] looks very different than it did 17 years ago, just in the diversity of the makeup of them, and their skill set.”

Best Practices in Onboarding

Williams says a best practice in onboarding new talent is identifying right off the bat exactly where an individual fits into the organization and what their career path will look like. He sets up one-on-one calls every week with each of his employees to set goals for the week, Mike Devlin, a principal at BCG Pension Risk Consultants, says when onboarding new members, he learns how to respond to different personalities.

“You need to start recognizing what’s their personality,” says Devlin. “What makes them tick, what makes them happy, what stresses them out?”

As businesses increasingly operate online, teams must also embrace the digital experience for new employees, says Marilyn Suey, founder of the Diamond Group Wealth Advisors.

At her firm, they institute a relatively long process of training, with an emphasis on operational systems. Suey notes that being a digital native is a plus, so in hiring they will often look for someone with basic technical and digital skills that can then be transferred to the more specialized needs of the business.

Hiring talented people with a passion to serve is one of the most important components of growing a team, she says. They do not necessarily have to have a background in retirement services.

“I just hired someone who is a highly academic college graduate without any background in finance, accounting, marketing, sales,” says Suey. “He just was a very articulate and intelligent person that we interviewed. He had the emotional quotient and the aptitude for wanting to serve, and that’s one of the biggest areas in this business.”

Making Diverse Teams Work

The experts agree that diversity is important when scaling a successful team for the long term.

“If somebody comes in bringing something different—a different background, a different experience, a different skill set—we can all learn something from them,” says Williams.

Devlin, who’s firm is weighted towards more highly experienced advisers, says he is trying to recruit younger adults in their 20s and 30s. “Young employees just have thirst for knowledge. Their energy, and just questioning everything, is extremely helpful,” he says.

Diamond Group’s Suey understands firsthand what a lack of diversity looks like. When she first entered the space, she says only 5% of advisers were female.

“I am an Asian American, born here [in the U.S.], educated here, and was a beneficiary of the equal rights amendment,” says Suey. “I am very aware of how in my era I was given an opportunity to participate in the economy in corporate America. I pass that on over all these years, making sure that intentionally, but without discrimination, we hire the best people for the positions that are open at the time.”

Based in in Northern California, Suey says the firm needs to have a diverse team, not only in ages but also in other demographics. As clients tend to be highly diverse across ages, cultures, and languages, the firm aims to serve all types of individuals.  

“Don’t let anybody ever tell you no,” says Suey on growing her firm. “Someone says no, that means not yet, and you go a different path.”

Practice Management July 3, 2023

The Business Benefit to Succession Planning

Planning for the future of a retirement plan or wealth advisory isn’t just about the years ahead—it can help drive success in the present.
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Art by Alfonso de Anda


Late last year, the Financial Regulatory Authority came out with a 31-page regulatory notice highlighting the importance of succession planning among financial advisories.

While the notice refers to the aging demographics in the industry, it starts with a section on the benefits of succession planning no matter how close an advisory is to a transition. 

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Philip Shaikun, vice president and associate general counsel at FINRA, says the organization emphasizes succession planning to protect both the industry and the end investors that advisers serve.

“There are a number of key benefits to succession planning,” Shaikun says, noting among them: minimizing operational risk, reducing regulatory risk, and keeping clients happy. “If firms have a good plan in place, that will inspire confidence in customers that the firm will maintain the same level of services, so from a competitive standpoint it benefits firms,” he says.

Succession planning can also mitigate legal and regulatory risk that could cost both time and money. This is especially true for smaller advisories as they “don’t always have additional staff that can step in,” Shaikun notes. 

FINRA does not want to imply that advisories are “in regulatory peril” for not having succession planning, Shaikun says, but advisories should be proactive to get the best outcomes for themselves and their clients.

Dressed for Success

Rob Madore, vice president at consulting firm MarshBerry Capital LLC, works with retirement and wealth advisories interested in selling. He says that for an acquirer to even consider such a transaction, the seller should have a plan in place for the future of their practice.

“A well-prepared business can tell the story about what makes them unique, why they’ve had such success, and back it up with readily available financials,” Madore says. “That is a firm that has the greatest optionality and leverage.”

Madore notes that, in what continues to be a strong acquisition environment, the price tags some owners may be dreaming of can be hard to land in reality, and particularly hard if you don’t have a longer-term plan for the firm.

“The elevated multiples that are so often floated in conversation really aren’t for those looking for an immediate exit from their firm,” Madore says. “Acquirers are looking to grow, and not just grow through the acquisition, but see the business grow organically after the acquisition – so they highly value a team who will stay with the business.”

Madore says acquirers are looking to bring advisers on that will be with the business at least three to five years, or more. When deals are structured, the acquiring firms tend to try and incentivize growth after-the-fact with strong earn-out components.

“In my experience, preparation and intentionality on the part of the seller have the greatest correlation with finding the best deal for you, your clients and your employees,” he says.

Joe DeNoyior, president of retirement and wealth management for aggregator Hub International, reiterates the importance of a strong team for advisories they are looking to acquire. An advisory with practice leads that are dedicated to the firm are preferred to Hub “helicoptering people in to take over the business,” he says.

“We don’t want to be somebody’s succession plan,” he says. “We don’t look to acquire firms by picking up margin and cutting head count—we want strong people.”

Even if an adviser is not looking to be acquired, it’s better to have their house in order for unexpected contingencies, according to FINRA’s Shaikun. He compares succession planning to estate planning—advisers may put it off because it doesn’t feel imminent, but if something unexpected happens, a contingency plan ensures a smooth transition.

“We tend to think about this kind of planning as not being discretionary,” he says. 

Next Gen

It’s not just independent firms that need to consider succession plans, however. Even large aggregators like Hub are starting to focus on the next generation of its advisers, according to DeNoiyer.

The aggregator is currently working on a program to cultivate the careers of its more junior team members, according to the retirement and wealth head. DeNoiyer says this work is in “early stages,” but that Hub’s insurance side already has good systems in place for his division to emulate.

“Where we are now in our in our cycle is being laser-focused on career pathing for these teams,” he says. “One of the reasons that we sold to Hub is, you know, is that I have a great team around me, but their career path was limited to where the adviser lead took the firm.”

No matter an advisory’s situation, however, Madore says the best positioned practices are those that don’t hold off on succession planning.

“The best time to start working on maturing the business, preparing for a financial event, or determining what options are available to your firm is when you don’t have to,” he says. “Time is the greatest killer of deals. The more work you do up front, the less chance of issues in the later stages [of a deal.]”

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