Financial advisors, by and large, go into the business for two main reasons: their entrepreneurial spirit and their desire to provide a truly client-centered service. As we listen to the stories of those who made the momentous decision to launch their own practices, we hear repeated themes.

And yet, at a certain point in every practice, a decision point arrives. As the practice grows and the advisor — often a solo entrepreneur — contemplates the various paths forward, they must come to grips with the fact that the very qualities that got them into the business — their desire to make their own decisions and their determination to put their clients’ needs first — can put them at the most common fork in the road. To scale the business, advisors often feel they must give up something important: either the dedicated time with clients that they treasure, or the autonomy they crave.

To Merge … Or Not to Merge

Many advisory practices have sought the answer to the scaling dilemma in mergers with other firms. Indeed, despite the disruptions of the 2020 pandemic, M&A activity was brisk, and some industry observers expect the trend to continue through 2021. But for other practitioners, selling a significant portion of equity in a firm they have built is less appealing. Prizing their independence and the uniqueness of their vision, they are not willing to trade away simply for the sake of creating a larger profile in the financial advising landscape.

Is Growth Really the Answer?

Often, a prime motive for scaling a practice is the desire to take firm profitability and its footprint to the next level. However, growth, in and of itself, doesn’t always go in tandem with higher profitability. Industry thought leaders have pointed to the fact that when firms grow, their expense ratios can easily rise faster than their increases in revenue, due to the additional infrastructure, human, structural and technological, required to support the larger enterprise.

Making the Call

Scaling your financial advisory practice, while it can offer many financial and professional benefits, is ultimately a core strategic decision. As you consider the costs and opportunities involved, you should ask yourself some key questions:

  1. What is your why? Think about what got you into the business in the first place, and also about what gives you the greatest fulfillment. If scaling your practice will enhance those essential motivations, then it’s probably worth pursuing.
  2. What legacy do you want to leave? If your chief aim is to place a landmark in the industry landscape, then scaling may help you achieve that. If, on the other hand, your central desire is to maintain a comfortable and enjoyable lifestyle until you’re ready to retire, scaling is probably less important for you.
  3. What is your primary value proposition? Is your brand driven primarily by the unique client experience you provide — one that is founded on the individual focus and care you bring to each client interaction? Or do you seek to become “more things to more people,” with a goal of expanding your circle of influence as widely as possible? These are different orientations, and scaling may be more appropriate for the latter than the former.

Whatever your motivation for the scaling decision, the Wealth Advisor Alliance can provide industry-leading support for your vision. We help advisors establish and grow successful wealth management practices.

We help advisors establish and grow successful wealth management practices. To learn more about how we can help you amplify your life’s work, contact us at You can follow us on Twitter@theWAAlliance and on LinkedIn.

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Jacqueline Sergeant, “Advisor M&A Grew in 2020 Despite COVID,Financial Advisor, January 20, 2021.

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