Bringing in an outside consulting firm bring true value to your firm?
Having been in the industry for 20-years, I have had the privilege of being a part of great broker-dealers. Throughout my time with these various firms, the organizations have brought in numerous different consulting firms to work with our Business Development teams, leadership, and recruiting enterprises. I can’t speak to the exact cost of these consulting firms, but my estimates would be well into the hundreds of thousands of dollars.
While I am not in anyway attempting to discount any of the consulting firms that came into the broker-dealer I was a part of as there were valuable pieces that each of these firms brought to our team and organization. However, I would say that these consulting firms that came into the organization while great, did not specialize in the financial services industry. While you can say that sales is sales in any industry or recruiting is recruiting within any industry, I would profoundly disagree. Business Development and recruiting financial advisors is not sales in any capacity in my opinion. Recruiting financial advisors is more about building trusting relationships, putting the needs of each advisor ahead of any personal gain that you may receive, and showing a true passion for the successful business that advisor has built. With that being said, I would not say that sales is sales in any industry, nor is recruiting the same in any industry. My opinion is that if you truly want to get the most out of an outside consultant to bolster your recruiting efforts, you must strongly consider hiring a consulting firm that has walked in the same shoes as your Business Development professionals and understands the sales cycle of financial advisors.
Back to the purpose of this blog posting, is hiring an outside consulting firm bring true value to your firm? While my opinion maybe bias, you can’t disagree with the numbers. Our firm specifically seeks to at minimum increase GDC recruited by 10% with firms that we work with. While 10% seems like a low number and there are no guarantees, let’s do the math. If your firm has 10 Business Development professionals and on average the cost for an outside consulting firm to work with all 10 professionals is $2,500 a person, that comes at a cost to your firm of $25,000. If your firm has a recruiting goal of recruiting $30 million in new GDC each year and working on a typical profit margin of 10%, then a 10% increase would be $3 million in additional GDC that your firm recruits. If the cost of the consulting firm was $25,000 and you increase your GDC recruited by $3 million, that is a net gain to your firm after the consulting firms fee of $275,000 each year. With simple math that I have outlined and from a financial standpoint it absolutely makes sense for any firm to bring in an outside consulting firm. Now, let’s get a little more technical than just the financial benefits. I have found that many firms that I have been a part of and competed against, successful firms tend to become complacent in their practices because of the success they have had. The additional benefits of hiring an outside consulting firm is that you gain an outside perspective that has been with various firms to provide professional input of minor changes that can be made within your firm to assist with making the advisor experience better than it already has been. We have learned that every firm can do things better to become even more successful and having an outside consulting firm bring a unique perspective is a way that can assist you with doing exactly that.
While we at Trusted Visions are extremely excited to be rolling out new workshops to help boost your recruiting efforts, we also wanted to provide this blog to showcase the benefits of having any outside consulting firm that specializes in the financial services industry provide these services to your firm. Having a firm that has successfully recruited in our industry that can provide real-life experience and insight is a value as you can see from the numbers alone that is easily justified. I caution each person that reads this blog that you have to go into an agreement with an outside consulting firm that you are open to changes and suggestions and not set on the way you are doing it is the only way.