It took almost two years for Gretchen Stangier, president of Stangier Wealth Management in Portland, Oregon, to find the right hire. But, she says, the effort has paid off in flexibility, the option of taking on clients with lower minimums, business continuity and a built-in sales plan when she’s ready to retire.
But Sullivan Financial Services President Kristin Sullivan, who opened her Denver practice in 2007, made a different choice. “I really don’t want to be anybody’s boss,” she says, “and I don’t want to make the schedule compromises that would be necessary to building a bigger business right now.”
Hiring another planner for what has always been a solo practice is a trade-off. It can bring big benefits, but it also involves big investments of time and effort.
PLUSSES: HAVING A BACKUP AND FLEXIBILITY
Stangier began her practice in 1998, and at first, she did presentations and traded backup duties with a planner in another practice. “Then he brought in his son-in-law, and I was without a second person for maybe five years,” she says.
“I really don’t want to be anybody’s boss.” — Kristin Sullivan, president of Sullivan Financial Services, Denver.
She missed having a backup. More than that, Stangier realized another planner would give her business continuity, the option of taking on clients with lower minimums, flexibility and a natural buyer for her firm when she’s ready to retire.
So Stangier, after an extensive search, hired a local bank employee, who had impressed her with a flair for customer service. As a result, when her mother broke a hip this summer, Stangier was able to devote time outside the office without worrying about neglecting her clients.
Norman Boone, who founded Mosaic Financial Partners in San Francisco, California in 1987, had similar motivations when he hired the first planner for what has become a staff of 18. “In my view, one of the reasons to grow is to serve clients in more ways than you could if it were just you,” he says.
His staff allows him to focus on the work that he enjoys, Boone says. “I also have a lot more flexibility, because I have other people I can rely on when a client calls. When I can get away from things, I refresh, and the quality and creativity of my eyes increases.”
The possibility of selling the practice later also motivates Boone. “The less it’s about you and the more it’s about your services and products, the more valuable it can be to someone else,” he says.
MINUSES: COST OF MONEY AND TIME
Finding the right hire was “time-consuming and frustrating,” Stangier says. She interviewed a few candidates from broker-dealer firms but decided that she didn’t want to undo anyone’s bad habits. Customer service was the one skill she couldn’t teach, she determined, and so she looked for people who offered exemplary customer service.
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Stangier focused on Danny Alexander, who at the time was “a young, polite guy who worked at my bank,” she says. “I had my eye on him for 18 months. For the first six months, I just watched him, especially his rapport with older people.”
Next, Stangier sat down at Alexander’s desk and took out a home equity line, “even though I didn’t need it,” she says. “I put stumbling blocks in front of him to see how he’d deal. And then I gave him new client materials and invited him and his wife to a presentation. He said, ‘I don’t know anything about this,’ and I said ‘I can teach you.’”
Training came next. “When you’re with a broker-dealer, there are training systems in place. When you’re an independent RIA, and the new hire is coming from outside the industry, that’s harder,” Stangier says. “I wanted him to have anti-money laundering classes, which were not easy to find. He also sits in on all the appointments and teaches half the classes we offer to prospects and clients every month. He’s done a lot of book- and online-learning, and he has his own clientele base, where he is putting theory to practice.”
“I put stumbling blocks in front of him to see how he’d deal. And then I gave him new client materials and invited him and his wife to a presentation. He said, ‘I don’t know anything about this,’ and I said ‘I can teach you.’” — Gretchen Stangier, president of Stangier Wealth Management, Portland, Oregon.
His clientele, some of whom he brought with him, also includes those with lower minimums than Stangier requires; many are the children of Stangier’s clients.
Stangier now pays Alexander a salary and funds his benefits, including health insurance and matching 401(k). Eventually, he will cover those things himself. “It will take about three-and-a-half years to break even,” she says.
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She expects Alexander will make mistakes, and those mistakes will cost her money — though so far, she says, “his mistakes have cost me less than mine. I don’t beat him up for mistakes. I want him to be confident, not so scared that he’s afraid to make a decision.”
Boone says planners tend to take training too lightly. “You have to spend some time showing people how to do things the way you’d like them done,” he notes. “It’s easier to do it yourself in the short run and much harder in the long run.” Boone uses a combination of vendor software and his own time to train new hires.
All in all, Stangier says a new hire is a significant investment — but one that is worth it. “What’s the value of being able to leave the business for five weeks without taking my cell phone with me?” Stangier asks. “I want to be able to travel and eventually to retire.”
Meanwhile, Sullivan, who has young children and has always been a solo practitioner, says she hasn’t ruled out expanding all together. “Maybe sometime in the future, I will.”
