Explore the three stages of RIA growth—fitting, producing, and scaling—as Jordan breaks down the unique challenges and success factors of each phase for financial advisor founders balancing practitioner and executive roles.

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Transcript

Jordan Haines:

Hello friends, and welcome to Elementality, A show where financial advisors explore modern and relevant client journeys.

I am Jordan Haines, and today we are going through the three stages of RIA Growth. Now I’m going to make some broad generalizations today and that is intentional. That is okay. You’re welcome to fight back and actually if you have any questions on this, please feel free to reach out to me. You can find me on LinkedIn, Jordan Haynes, A-I-N-E-S, or you can email us@podcastatgilmans.com.

Again, I wanna hear from you. I wanna hear what your thoughts are on this now, over the last few years, um, our team has worked with hundreds, if not thousands of financial advisors, and most of these financial advisors are also the founder of their financial planning business. So they are what dentist advisors would term as an entrepr, unprofessional.

Someone who is tasked with working in the business as a producer and a practitioner, and someone who is in charge of working on the business as an executive and a leader. And so there’s this tension, this balance that happens. And over the last few years, I’ve asked many, many financial advisors, many of these founders, what growth has been like.

How growth has been. And typically what I hear is people falling into one of three categories of growth. So I wanna talk about these three stages, these three categories of growth. I wanna talk about what the role of the founder is in each stage. I wanna talk about what it looks like to each person in each stage.

And then finally, I wanna talk about what the key to growth or the key to successes in each stage. And they’re going to be different, and that’s okay. So again, please feel free to reach out if you have questions, thoughts, concerns, anything along that. So let’s get into it. Now most financial advisors that are starting an RIA or starting a firm is going to enter a phase.

If they don’t have clients already, we call, or that I call the fitting stage. The role here of the founder, the the financial advisor, is that of a practitioner. Typically, they’re by themselves and in this phase there’s a lot of testing and a lot of experimenting, so it looks like to them. That systems are relatively loose.

Some advisors I hear describe this as like throwing things at the wall to see what sticks. So again, you’re, we’re just trying to see what works the key to be successful here. And the reason I call it fitting is because we are trying to find. Service market fit. Now, you might have heard this term before, used in other, uh, context, primarily.

Traditionally it’s known as product market fit in like the tech world. This really is, there’s two parts to this. There’s your service and then there’s your market. You wanna find the right people who actually want what you have to sell. And something happens when you find your service market fit. Things seem to click because now you can replicate that service and you can replicate the types of clients that you’re going to work with.

But until that point, you are tasked with trying to find the right people and creating the right service. And most advisors, while we think we have the right service right away, and you’ve heard me talk about this. There’s naturally going to be some gravitational pull because if you identify the right clients that you wanna work with, they are going to demand things differently than other clients might in different demographics.

So finding service market fit is incredibly important. Now, let me just make a quick note here. Most advisors, most founders in this role. We’ll unintentionally leave this phase and move to the next when they found their service market fit, because things tend to click into place and they don’t need to document anything.

But I highly encourage you if you are beyond this phase, and you will know you are by listening to this next two. If you’re beyond this stage, I want you to go back and ask yourself what service. And what clients are we working with? Get really clear on that, and you can go back to the last two episodes where we talked about the business manifesto and some other things to really help you dial in what is the job that we actually do for these clients?

What is the service that we actually provide to them? I find it really helpful to articulate and document that there. This is the first stage. It feels like chaos. It feels like we’re just trying things out, but once we have found service market fit, that firm, that financial advisor, that founder is this going, is then going to move to the next stage of growth that I call producing.

Now, the role here of the founder is yes, a practitioner like they were before. Yes. Experimenting, yes. Exploring. But now they’re the primary rainmaker, what I’m gonna call the producer. So the two roles the founder has right now is producer and practitioner. They’re delivering the service and they’re finding new people to add to that service.

It looks like a lot of hard work, right? They’re getting new clients, they are growing new revenue. What I often hear from founders in this stage. Is something along the lines of, I’ve been in the trenches, I’ve been grinding it out, I’m getting it done. It just feels like a lot of hard work because we know what works now, so let’s double down on that and let’s grow the business by getting new clients.

By growing revenue, by really maximizing my personal production and that my friends is the key to growth in the producing stages. Maximizing your personal production. You are, yes, the entrepreneur in this case, but you are also the primary practitioner, the person who builds and adds value to clients. Now, what something interesting tends to happen here is.

As the advisor, as the founder starts to double down and produce and get better at being the primary rainmaker, well then we get more clients and then we have to continue to add value to those clients. And so this typically is when I see founders start to add to their team. They add a client services rep, they might add an associate advisor or a paraplanner.

Maybe they add like an operations type of role or someone that’s gonna help on the investment side. Whatever that is, that typically is when we start to fill those roles that allow us to, um, lean into that capacity a little bit more. They, we are expanding and growing, so we want to hire people to support that growth.

But that growth has been primarily led by the founder as a producer, right? Again, working in the business, and this leads really naturally into the next stage, what I call scaling, and in the scaling phase, the founder, in addition to being a producer and a practitioner. They are now an executive and a leader of a business.

What this looks like to them is a lot of business building systems, mobilizing the team and, and I often hear people who have navigated this successfully, they describe this as like momentum. It’s starting to build, it’s starting to feel self-sustained. Things are starting to happen without me having to be involved in that.

Now the key to be successful in scaling is to have some key infrastructure, to have basic, uh, foundations that can empower growth beyond just the founder. So if I were to summarize these last two stages, you have producing, which the key to growth here is working in the business as a practitioner, as a producer, whereas the key to working or growing and scaling is to work on the business as an executive, as a leader.

The difficulty arises, like I mentioned earlier, where you, the founder, the financial advisor, is tasked with being in the business, delivering value to clients, getting more clients, and also working on the business and building an infrastructure there that can enable this thing to grow beyond just you.

And there’s this tension that happens, a tug and pull relationship, where the default to growth in the past has been, let’s get more clients, let’s add more value to clients. But now we’re filling a pull to now focus on the business. And sometimes it’s lack of ability. Sometimes it’s lack of just time.

Sometimes it’s lack of understanding or even know-how to work on the business. But either way, there’s this tug and pull and finding that balance is incredibly difficult. There are so many firms though, that have navigated beyond scaling, and once that basic infrastructure has been built well, it makes it a whole lot easier for you, the founder, to remain as the practitioner or the, the, the producer.

To also be the chief visionary of the firm and then to add a team that can grow beyond you, and that’s incredibly important. Now, where you fit kind of depends on what’s top of mind. I think most of you listening to this will be able to self-select where you’re at now. A lot of people that I have talked to over the years have been, and a lot of people that use elements are at the tail end of the producing stage.

So they have done a really good job at maximizing their personal production. They’ve built a service that matters to people. And they’re at the stage right now where they want to replicate that they want to. What sometimes I hear is systematize or productize that, and that frankly is why a lot of people sign up for elements.

They see the scorecard. This beautiful designed thing that helps me really quickly at a glance. Understand how my clients are doing. In fact, if you go back and listen to the very first two or three episodes of Ality, you’ll hear Reese’s story of how he came to create elements to begin with. And one of the primary drivers among many, but one of the primary drivers.

And if you ask him today, uh, what caused him to create elements in the first place was that he had a young advisor, Ryan Isaac at the time, who he wanted to train up and make sure that they were offering a consistent service. And they created that as a way too. Make the service more tangible, more productized.

So that typically is where advisors are coming to us. They’re thinking, I want this to replicate beyond me. I want to be able to continue to work so that I can find this balance of working in the business and working on the business. This my friends, is the RIA Growth Journey. Let me give you a quick summary and then I’ll talk about the main key takeaways from this, and we will likely be breaking these out in future episodes to talk a little bit more about them.

But if I were to summarize this really. Succinctly, you have the first stage of REA growth, which is the fitting stage, and the key to growing here is you’re finding service market fit, the right clients and the right service. The second stage is the producing stage where the key to growing is to maximize the founder’s personal production, your personal production.

And then the third stage is the scaling stage, where the key to growth is to build growth empowering infrastructure. It’s to find ways to replicate yourself as a producer and also then focus on working on the business. These are incredibly important. Now let me just offer a few words of advice or thoughts or observations, if that’s what you wanna take it, because I’m not an expert in any means.

The advisors that I talk to the most over the last few years, whether they’ve signed up for elements, they don’t work with elements, or I just meet them at a random conference or things of that nature. What I often find is that people that are in the throes of growth, they’ve found successful service market fit, they have found ways to maximize their personal production or even really they’ve, they’ve even built that key infrastructure to grow Beyond that, sometimes what I find is these founders, their business loses vision.

They forget why they’re in business. They forget the reason for this business’s existence. They don’t know actually what job they’re trying to do for their clients. And so this is an add-on to our episode last week where I talked about the importance of organizational clarity. You need to understand and have it clearly documented.

I know sometimes it feels like it’s not important for this to be documented, but your team will thank you in the future. It needs to be documented what you are doing for your clients. Why you are in business, who you’re in business for, what progress you’re trying to help your clients make. What do you believe about that progress?

How might you use your craft to help clients make progress? These are the basic foundations of a business manifesto or orienting motions or clarity, whatever you wanna call it, that really help you document and make sure that what you found in that fitting stage can continue to add value there out. The last thing that you want to do as a firm owner is to scale the wrong thing.

I don’t need to talk about the results of that because if you scale the wrong thing, you’ll be left wondering, what did I create? What is this thing? Does it even give value in my life? So think about the things that you’re creating. Make sure that you have things set up for success. Start today to build that key growth empowering infrastructure.

If you have questions about how to do that, please feel free to reach out to us. We can help you do that. Elements is one of those key tools that can help you build that growth empowering infrastructure. With that, my friends. Please let me know if you have any questions, concerns, pushback. You don’t have to agree with me.

That’s okay if you don’t. And uh, with that though, we’ll see you next week.