Volatility and uncertainty during the early days of the COVID-19 pandemic brought a forced pause to the year’s plans for most Canadians and businesses – financial advisors included. But several advisors have chosen to shift back into growth mode carefully in recent months as client demand has put their plans for strategic long-term expansion come back into focus.
Before COVID-19, Robyn Thompson, president of Castlemark Wealth Management Inc. in Toronto, was focusing on adding more administrative staff to her team in order to increase support from a back-end perspective. After the pandemic hit and clients began placing a greater emphasis on financial planning, she chose to add a younger insurance advisor who’s a financial planner to her team instead in early September.
Although Ms. Thompson’s decision to expand the advisory side of her team this year was made deliberately with a view to putting the infrastructure in place for long-term growth, it was not taken lightly given the revenue and cost pressures that the pandemic and volatile markets brought on, she says.
“My desire to grow as an advisor and to serve my clients is stronger than my fear of bringing on staff when we’re seeing pressure from a revenue conversation,” Ms. Thompson says.
“[But] the addition of a new staff member will, in fact, do the opposite, which is to create more avenues for revenue by being able to provide more value to clients ... and attract new clients in a way that fits within the new norm that we live in,” she adds.
April-Lynn Levitt, a business coach for financial advisors with The Personal Coach in Oakville, Ont., says that while many of her advisor clients were initially waiting to gauge the impact of the pandemic on revenue and growth, several have added team members over the past few months. She says advisors have shifted from reactive to proactive mode as demand from clients increases.
Many advisors were surprised by the success of the virtual model with both existing and new clients and see this as an opportunity to grow strategically, focusing on where they need to augment their service offering, Ms. Levitt says.
“If you have the mindset that, ‘Yes, we can do business this way in this new environment,’ then those type of advisors have been really exceeding,” she says.
As the panic of mid-March gave way to reassurance that the economy was not coming to a halt, Elke Rubach, principal of Rubach Wealth in Toronto, also made the decision to expand her firm strategically.
The first step earlier this year, she says, was to initiate a strategic review of her firm’s marketing efforts to account for the pandemic, which led to further investment in resources and the team on that side of the business.
Ms. Rubach is also actively looking to hire three new advisors focused on asset management, insurance and financial planning as the need for advice has grown in recent months. The vast majority of clients are still opting to meet virtually, creating efficiencies in the business, she adds.
“When the phone is ringing, you’re getting more questions and your calendar’s full, that’s the time [to bring on new team members],” she says.
Similarly, Matthew McGrath, head of advisory channel and corporate development at Optimize Inc. in Toronto, says COVID-19 hasn’t altered the timing of his firm’s growth plans as it has partnered with several advisors and financial planners since the pandemic began.
“That started in earnest really this year,” he says. “Despite COVID-19 occurring, it really didn’t slow us down at all. In fact, it’s really made a lot of advisors out there realize the importance of having a good robust technology platform.”
For advisors considering expansion in the current business environment, Ms. Thompson suggests going back to the “ground level,” to examine their business plan and revenue model to see if these have changed and whether money can be spent on growth-related measures.
“How do we cut down expenses that are no longer needed to support the practice and allocate funds toward things that are going to support the current base, but also provide the ability to scale? You can’t scale without qualified staff,” she says.
The virtual nature of business at the moment should not prevent firms from bringing on extra team members as long as expansion makes sense strategically and financially, Ms. Levitt says.
At the same time, expanding an advisory firm successfully in the COVID-19 era requires clarity and communication beyond what may have been necessary previously, as the face-to-face component of bringing a new team member on board is missing, she says.
“It’s even more important to have all the things you would have in a normal hiring process, like a very clear job description and responsibilities, a very clear onboarding process and training schedule,” Ms. Levitt says.