Brian Shapiro, advisor development officer at the Wealth Advisor Alliance and Jonathan Rogers, co-managing partner of Forum Financial Management, discussed how firms can successfully leverage their distinct capabilities while planning for capacity, efficiency and profitability in the latest WAA webinar. Divided into three modules, Brian and Jonathan share a high-level overview of these areas. Read the transcript below.

Module 1: Measuring and Planning for Growth and Profitability

Brian Shapiro: Hello, I’m Brian Shapiro, advisor development officer here at the Wealth Advisor Alliance. Just a little brief background about myself, I’ve been with the Wealth Advisor Alliance for just over a year now. However, I’ve been in the financial services industry for over 20 years helping with advisors in different capacities, obviously not only by the recruitment role, but also consulting with advisors on various different types of practice management issues and strategies for growing their business. In this first segment of the three-part webcast series, we’re going to really concentrate on that last thing that I mentioned, strategies for advisors growing their business and how that plays out in the various different stages of their career. I want to introduce my special guest today, my colleague and co-managing partner of Forum Financial Management, the parent company of the Wealth Advisor Alliance, Jonathan Rogers.

Jonathan Rogers: Thank you, Brian, and thank you everybody for dialing in today. Hopefully we go through some good material and give you some things to think about and questions to ask. So just a brief background on Forum Financial Management and the Wealth Advisor Alliance, Forum Financial Management is a RIA that’s a national partnership, it’s advisor-owned, and it’s really built from the ground up by advisors to help us serve our clients in a financial planning and retirement planning capacity in a unique way that is truly client first because we’re advisor-owned. So that’s Forum, and similarly on Wealth Advisor Alliance, we are advisor-centric there as well. So, we try to help other advisors that may not be part of our RIA firm achieve their growth goals, help them build into the vision and the firm that they see themselves being in the future. So, we do that through a combination of consulting along with back-office services

Brian Shapiro: Well, thanks, Jonathan. So, as we both know, the financial services industry is constantly evolving. And with the events of 2020, I think it’s caused advisors to really look at the industry as a whole and figure out how that fits into their career path. But the way I see it, this is a great opportunity for advisors to consider what they should do next. The two big questions I’ve been asking advisors is contemplate, what do you want your business to look like in five years, and is it currently structured in a way to help you achieve both your personal and professional goals? So, with that said, Jonathan, what type of advice would you have for advisors as we enter 2021?

Jonathan Rogers: Well, one thing I can put it in the context of Forum and what we’re doing, one thing we’re doing is we’re looking and making sure that we’ve got our strategic mission, vision, goals laid out and clearly defined, because anytime you’re dealing with the day to day, kind of in 2020, it’s been the markets and clients and their concerns and as we’re kind of going into 2021, we want to make sure we’re on the right path. And you haven’t taken a lot of time, probably in 2020, to really talk strategically. So first thing is step back and look at where your firm is after this kind of chaotic period and assess things you’ve done, what you would do next time if there’s a market downturn, how you would approach the communications differently, how you would potentially approach employees or other things in a way that would make your firm stronger? So, the first is kind of assessment. So where are we at? What have we done? Is it on path? And then from there really evaluate going into 2021 and expecting to continue growth. Do you have the capacity in place you need? Are you doing things efficiently and is your firm profitable and what are you doing today for clients.

Brian Shapiro: Yeah, so let’s start with capacity, I do hear that all the time, especially with advisors, as their business is growing and they’re trying to figure out how many clients that they can bring on and what the staffing looks like. What type of advice would you give around that?

Jonathan Rogers: So, it depends on business model and I think it depends on your ideal client. So, again, going back to the strategic first, the ideal client is going to dictate how you serve clients and what capacity of your individuals are within your firm. The larger the client, typically the lower capacity for that advisor. And within our firm and within the Wealth Advisor Alliance, we have advisors who serve multi-billion dollar investors and we have advisors who serve mom and pop and have a larger number of clients that they service as a result. So that’s the first place to start is in benchmarking studies a lot of times you see numbers for capacity of an advisor between 60 to 90 clients. And so that’s a good benchmark, but it may not be right given the context of your ideal client. So how do you want to serve them and what team does that require to do that? The other key metric to think about, and this is one that a lot of times advisors will overlook, is how much time you spent doing client work versus how much time you spend growing the business itself and working on building the team, hiring, managing people, managing technology, dealing with the accounting, dealing with all of those things that come up on a day to day basis that are not specifically doing planning for clients, meeting with clients or communicating with clients.

Brian Shapiro: So, yeah, that’s a great transition into efficiency. Obviously, with technology and how it’s evolved, advisors have the opportunity to take advantage of this technology in order to build additional efficiencies in the business. How do you see that playing out?

Jonathan Rogers: And that’s a thing that we spent a lot of time doing because a lot of times when I see firms, what they do is they build out all these tasks and they’re often built in kind of workflows, right? And we need to really kind of evaluate are we building workflows for what purpose? Is it to drive efficiency? And if it is, I wouldn’t build workflows the way a lot of firms build workflows, because often it’s built to document what we do today and it’s just that documentation. So, when you’re building those workflows, when you’re building technology to support your advisors, the first place to start is what is truly essential. What are those tasks, like I alluded to a moment ago, like serving the clients, that are involved in serving the client, because that is truly what’s essential to our business, and the planning piece is secondary to that. Those are truly the essential tasks. So how many of those tasks can we get away from our advisors and into the hands of other people or preferably not into the hands of other people, but into an automation, into a way that it can complete itself without one of our team members needing to push it along? So that’s number one. Number two, again, within those client interactions, let’s define those really well. What do we want those client interactions to look like? Do we want to have a minimum level of service standards for the client and do we define that? Do we, when we engage a new prospect, do we have an automated marketing funnel when they come in? Do we communicate certain things to them? A lot of that, you want it to be very personal, so you don’t want it to be automated, or you want those initial impressions to be highly personal. But at the point where it makes sense, you can also supplement that personal with some automations of, oh, we’re glad you’ve been with us for two months. Here’s a piece about our firm and the people within our firm. And then the last piece is growth. And that is often not put in efficiency, right? So, growth is often thought of as what we need to build the efficiency to support as opposed to necessarily what supports efficiency. But if you define your client well and that doesn’t have to be narrowly, I’m not saying narrowly there, but if you define your client well, you define your deliverable well, that should lead to growth that is efficient.

Brian Shapiro: So, you have the appropriate amount of client per your capacity, you have the technology to serve those clients efficiently through your technology and processes, and what have you. How does to play into profitability?

Jonathan Rogers: Well, I think we’ve kind of started already building that out, right? So the type of client is important. And here I have a little bit of, for our firm, for Forum Financial, I mentioned we have a broad set of clients, but one thing we aren’t doing is necessarily trying to work with only the largest clients. I hear that a lot in our industry. I hear that you really ought to be working with really just the high-net-worth, the cream of your organization in terms of your clients being that top-tier of clients, the five million plus clientele, and I don’t think that’s necessarily in the long term, what will be most profitable, depending on how the business is built and the service model of those clients. So, you know, going and thinking for yourself, how do we serve these clients? Well, how do we serve them efficiently? One of the important things for serving smaller clients efficiently is getting younger team members and less experienced team members engaged early in the advisory side of the business. And so having a smaller client whose primary relationship is with a younger advisor and they’re taking care of the client services work through an automated tool, we can get it down where, with a very simple, small client, it might take a couple of hours of meeting with the clients, plus maybe a half an hour in the backend setting everything up in order to bring that client on board, and then an annual meeting, the check-in meeting with in between life events happening and the advisor engaging digitally with that client, so you can get it down to where it’s very efficient from a time perspective, your ideal profitable client may change.  The other thing I would stress there with type of client is, again, that team structure, if we can get that team structure down to a single individual, it makes a big difference, whereas our largest client, we might have five or six individuals working very regularly with that client, and both are good deliverables and necessary deliverables for those clients, but the service model is different. And so that really dictates profitability across your firm.

Brian Shapiro: Yeah, I’ve seen some successful advisory firms literally create the segmentation, and at least internally, outlining exactly what those different segments of clients are going to receive. Now, sticking to that, to your point, can be hard because as fiduciary as we want to do everything for all clients, but I think that’s a good, at least internal, document to help guide advisors and their actions in the level of it.

Jonathan Rogers: But again, speaking of what I’m saying, a lot of times in those firms that have defined it really well, but this client is such a good client and I also want to do these couple of things, and it’s okay, because I’m going to do this one thing for one client, right? That’s where it becomes really, really difficult to stay disciplined, too, internally, because you’re wanting to do well by those clients, and you don’t want to tell the client no. And it’s hard to graduate them up if there’s a fee difference, which there probably ought to be, it’s hard to graduate them up into that other level of service.

Brian Shapiro: Great. No, I think that’s really good advice. Well, thank you so much for your time, Jonathan. I think that should about do it for Module One. In Module Two of this webcast series, we’ll consider the question, how do you determine what kind of practice you want and how many hats are you willing to wear?

Module 2: Designing the Practice You Want

Jonathan Rogers: All right, thank you, Brian. So, this time, we’re really going to be talking about kind of how to grow that practice through time and the things that come up that can knock you off of that path if you’re not careful. So, the first one that starts from the very beginning is complexity. And a lot of that complexity initially starts from the client. And it’s about dealing with the complexity of tax planning and estate planning and new regulations coming out in the markets going up and down, right? And as you grow the business, it becomes more and more about the complexity of the business as opposed to the complexity of the client. And then we’ll get into how to build a well-functioning team to deal with that complexity, the processes and technology to support that team and, last, measurements, different metrics you can use to make sure that that whole system is on track. So, with that, I’ll just kind of briefly talk about that complexity. Again, we’ve already talked about how it comes from the client originally, but the people become largely what you start managing. And somebody that has a small enterprise firm that has four to five individuals begins to spend a third to half of their time managing people. And it’s not just the hiring process, it’s the management process to make sure that they’re on track with their personal career goals. It’s outlining their areas and skills that they need to improve. It’s handling day to day questions they have. And the sole practitioner who has largely just spent his time or her time advising clients and doing financial planning is now faced with half of their time or more being spent talking to their team and making sure things are operating well and functioning well, but not necessarily spending time with clients, developing those relationships. The second is processes. That’s a little bit easier to measure because as firms grow, inevitably we add processes, and very rarely do we get rid of processes. And so, making sure that you’re managing your processes and managing typically involves both the addition and subtraction of new things to your workflows, new things you’re doing for clients on a recurring basis, that process becomes an important part of management. And lastly, technology, because technology should make us more efficient. It should also make us avoid mistakes, right? But often it leads to complexity itself that can lead to mistakes.

Brian Shapiro: So how do you see some of those complexities being overcome?

Jonathan Rogers: Let’s take them to some degree in order, so the people, it’s about building that well-functioning team, as we outlined on the first slide. So, this is a little bit of a decision tree, very simplified as you grow from a sole practitioner on the left when it’s only you and you start making those first hires. So, who do you make as those first hires, is it client service associate? Is it outsourcing a virtual administrative person or a turnkey asset management provider or compliance consultants like those individuals that are kind of key early consultants to start up a RIA? And then you start building that team beyond those first hires. So, being intentional about these steps can lead you to a very different outcome in terms of the look and the feel of your team, what team members you choose to hire. It will lead to what you spend your time doing, as well, as that leader of the firm, as probably the founder or early lead advisor within the practice. If you hire a large number of junior advisors, that’s going to lead you towards managing a team of advisors and less time in client meetings at the end. So each of those steps becomes an important decision. The last one as you get into a larger firm, do you hire management? Because often what you see is your highest point of profitability, theoretically, is when you’re working by yourself, right? Because you don’t pay yourself a salary really, and you have 100 percent profitability or 90 percent profitability that declines through time because you start replacing yourself. And so, with that kind of transitioning to a firm level, one of the things you have to think about is who’s going to be that management tier? Is it going to be somebody you hire or is it going to be merging them with other partners who have skill sets or operations in place? Or is it going to ultimately be you as the CEO in the management and you’re not going to be involved in client relationships anymore?

Brian Shapiro: Yeah, I find that advisors, when they start growing the business, they spend way too much time in the business rather than working on the business. Any thoughts on that?

Jonathan Rogers: I mean, initially, here’s a picture we put together exactly on that topic, which is initially you’re wearing all the hats, right? And often you start from the outside and go in on this picture. You hire to the outside and eventually you end up with you as the founder CEO and you as the head of advisor services, and that’s kind of the last role that founders retain. But within that, I think it very much is a question you should ask of if you want to be on the top or the bottom of that in terms of do you want to be the head of advisor services or do you want to be the head of the firm?

Brian Shapiro: How would you say technology could play a role and just kind of automating some of this and preventing you from having to make hires and what have you?

Jonathan Rogers: So, here’s kind of the way I kind of think through technology. First, it needs to work, right? And in our environment today, we need it to be in the cloud and we need it to be secure. And one question I often ask advisors is how much of a learning curve is it for new people? Because that’s a good gauge of complexity and how much complexity your technology adds versus removing from your operations. The other piece is integration, that’s a keyword that’s thrown around constantly within our industry. You want your technology to be integrated. Two good questions to ask on that are how many points of entry do you have to do for every piece of data? And do you sync things between systems, namely to avoid that data entry, but also to keep things up to date? So there again, often we see workflows and other things do a very good job of avoiding errors and documenting for compliance and to make sure we know what each other is doing across the team, but we often lose automation. We think of workflows as being automated, but oftentimes they don’t lead us to avoid steps. They add steps in the process and add information that needs to be added into the system. That’s another kind of key distinction in how I think about whether that technology is actually delivering efficiency or not. And it may be okay sometimes to not deliver efficiency in exchange for good documentation and other things, but too often it does not automate our day. And the last piece, does it help clients? And that’s one that I think, it shouldn’t necessarily be lost. It should be, how useful is the client portal? And if you have an open rate of five percent, probably not all that useful. So how do we produce more things that are useful to the client that makes the engagement at the beginning? So, a data collection process at the beginning that’s easier for them to do at home before they come meet with you. That’s one way for some clients, providing a lot of ease of use and having that paperwork process be easier or account opening process, because hopefully we get away from paperwork being something we describe related to accounts, right? So how do you get it to where it’s simpler for the client, but also allow paper when the client deems that to be simpler? So, do your processes allow for it to be simple for the client however they choose to engage?

Brian Shapiro: Well, great. So, you implement this technology, make some of these changes. Is there any certain way that you recommend advisors to try to measure the benefits of this and whether it’s working?

Jonathan Rogers: And we put up a lot of different metrics as an industry, right? So, what I’ve tried to do here is map out ones that I think are really the things that should be in that top dashboard for a firm as they grow, and they break down into two simple categories, growth and efficiency. So, growth, there’s simple growth, and almost every firm I talked to measure these, number of households added per month, AUM and revenue added. Each of those is an important metric, no one is encompassing of the others. I think new households is absolutely critical. And if you can measure revenue as opposed to AUM that’s probably better. But AUM is actually what we do because it’s simpler to measure and people are used to talking in terms of AUM. So those are kind of interchangeable, but those are simple metrics almost every firm has. The quality of that growth is, I think, as or more important. So, the things we look at for quality of that growth or what are the net contribution rates, and we do it in a kind of histogram way by age group. So, are we doing a good job engaging our younger clients to continue and regularly contribute? Are they growing rapidly? Are we bringing in clients who grow with us is fundamentally the question, because a hundred thousand dollar client that’s adding twenty thousand dollars a year is more valuable than a three or four hundred thousand dollar client that isn’t. Age is also a key metric in year-over-year change in age. So, one of the key metrics we’re trying to turn positive and we actually have it in recent years is the age of our client base becoming younger. And so, we are adding more younger clients than the one-year shift in age and the loss of older clients, but the one-year shift in age that happens with every client. And that’s a good long-term metric to target for the health of your firm over the next 20 to 30 years, it should still be looked at over the next one to five years. And then operating costs excluding market, so for growth purposes, you don’t want to really factor in the marketing costs, you want to look at what is our operating cost for servicing these clients? Because one thing that a lot of advisors do is, they say, oh great, I’m going to add these advisors and these client services people and I’m going to build out a really strong team to service these clients. But one part of the quality of growth is if I had to, if I’m adding fifty thousand dollar clients, but I’ve got to service them with five or six different people, that profitability and that impact on cost is not as good as hiring fewer people and servicing a smaller client base that may be a third of the revenue, but takes less than a third of that effort, right? So we’ve always got to keep in mind with growth, what is the profitability of that growth and that service model we’re delivering?

Brian Shapiro: Well, I think that about does it for Module Two, again, really appreciate your time and insights on this very important topic. 

Module 3: Deciding Whether or Not to Become an Entrepreneur 

Brian Shapiro: In Module Three, we’re going to transition into the decision that advisors make while entering the industry, really thinking through whether they want to be an employee of a large independent advisory firm or if it’s more important to them to be an entrepreneur and start their own practice.

Jonathan Rogers: And I think that’s an interesting kind of decision for more than just people entering to, it’s a decision we make as business owners whenever we consider merging with another partner or merging our smaller firm into either a roll up or a larger partnership. There are a number of points throughout that career path where we have to make this decision. And I’m going to outline a few of the pros and cons on either side, right? So, employee, you can be focused, you can choose what you want to do and you can really zero in on what you’re passionate about as opposed to having to being a jack of all trades as you’re growing an entrepreneurial business, you can choose what you’re doing. You receive a base salary and bonus, right? So more reliable. And it’s something where if you’ve got dependents who are reliant upon your income today, then it’s going to be probably higher dollars to start and then it becomes more and more stable throughout time. And last, there’s benefits that come with being an employee, 401(k) and health insurance and other aspects. And then freedom. Largely when you’re an employee, your evenings are going to be more your own, your weekends are going to be more your own, and you’d be able to have a vacation that’s a designated vacation and have others backfill for you, more so than if you’re an entrepreneur. On the entrepreneur side, you have ownership and ownership can be different things to different people. It can be the pride of building something. It can be the control of doing things your way and not having to answer to someone else. It can be the equity portion and that’s the next one, which is the equity upside, right? So, when you don’t take that base salary initially, you have the equity upside of the growth of your practice. And that’s really critical in in an RIA firm, because you have not only the new client growth, which is a percentage growth, but you also have the market growth and clients continue to contribute to their portfolios, often becoming more valuable clients through time if you’re on an AUM model or a scaled fee model where it scales with net worth or some other measure of complexity, those clients will become more valuable themselves. So, you actually have three different factors for growth in that equity upside and then benefits I put in here because often people think, oh, I get benefits over on the employee side, but on the entrepreneur side, you can control your benefits. You can have a cash balance plan if you’re if you’re in the second half of your career and you want to put more towards retirement savings. You can do a pension for yourself if you’re a sole practitioner or something like that, right? There are flexibilities and benefits. You pay for them, but in a sense, you pay for them on either side. And then freedom, which, if you’ll notice, is listed on both. This is a different kind of freedom, freedom to do things your way or its freedom to structure your calendar to where you have a month that you take off or two months that you take off every year and do all of your employee and client meetings in between. There’s a higher degree of freedom with an entrepreneur, but you also give up a lot of freedom in that you will often be on the hook and where the buck stops.

Brian Shapiro: So, it sounds like it’s not just one right answer there. You really just have to look at your unique personal financial situation, look at the cost benefit of each, because there are benefits on both sides. You have stability, but it’s capped, versus kind of the uncapped entrepreneur. But that does take some risk.

Jonathan Rogers: And it has to be looked at over time, right? And this picture kind of does that. It has to be looked at in those early years, you’re giving up substantial base salary. That can be several hundred thousand dollars. Can you sustain your lifestyle without taking on debt to do that? Do you want to take the risk of doing that? How confident are you in building that AUM and building that practice? So, there’s a lot of decisions here that aren’t black and white, and they’re something that we kind of talk through with each new advisor and determine what’s right for them. So, but the upside is there, whereas the employee salary often grows, you know, employee salaries grow at a fixed percentage more or less, whereas an entrepreneur’s salary compounds often at the growth rate of their firm, which in a small firm, small practice can be maintained at 20 or 30 percent. And so, you start off a lot lower, but how many years does it take you to break even with that that salary and the growth of that salary? And how rapidly are you able to do so. And to distinguish between independent entrepreneur here and supported independence, independent entrepreneurs if you started on your own, there’s a slower path because you’ve got to get all the RIA registration and technology stacks in order. Supported independence is a model whereby there’s two factors in here that we, within our Forum RIA, we have independent advisors that are separate from our partners and those people get a lot of leverage from tying into our operations and our processes and our marketing, as well as potentially stepping into client relationships from other advisors. So, there’s an acquisition element alongside acquiring their own clients directly.

Brian Shapiro: And does Forum Financial provide or the Wealth Advisor Alliance provide optionality as far as those paths?

Jonathan Rogers: So, we’ve got Forum Financial Management, which is an RIA firm. And within that we have our partners, which are large advisory practices that have chosen to merge in, typically. They were operating their own RIA firm and then chose to become partners of our firm. We’re one hundred percent advisor-owned, so that is the ownership of the firm as advisors who have been in the business. There are advisors who are on salary within certain partner offices, and then there are independent advisors that are under our RIA firm, but operate largely independently, they have ownership of their book of business, but they start off at zero, basically zero salary, just like an entrepreneur would. And then we’ve got people that set up their own RIA firms that tie in through our TAMP, which is the Wealth Advisor Alliance. And so, you’ve got all four of those potential paths, depending on where you are in your career, how much of a leap you can make to start that practice.

Brian Shapiro: Great. Well, again, Jonathan, great insight, really appreciate your time. That should do it for our Module Three here. Again, if you want to find out more information on the Wealth Advisor Alliance, please visit us at



As Advisor Development Officer, Brian focuses on recruiting like-minded advisors and Registered Investment Advisor firms to join Forum Financial Management (WAA’s parent company). Through a consultative approach, Brian works with firms to uncover their needs and challenges to identify ways that a partnership with Forum would be beneficial to their business. To learn more about how we can help you amplify your life’s work, contact Brian at

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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