Falcon Financial Advisers partner and financial adviser Tom Moloney, who recently started his own practice, quickly discovered the importance of striking this balance.
“I’m a big believer that you can be a great adviser and you can be a great business owner but trying to do both at once and take on all of those responsibilities, you’ll run into a wall,” Moloney told the ifa Show podcast.
“You’ve got to plan for the functions that are going to ensure the continuity and maintenance of the business.”
For many practices, principal advisers become too central to all the business’ operations. While often born out of genuine care, it can create what Peter Fysh, principal at Financial Planning & Succession, calls “principal dependency”.
“The test is if the principal can take two-three weeks off or longer, and the business runs well despite their absence,” Fysh said.
In his own transition to running a practice, Moloney explained that having a robust business infrastructure is important to ensure the operational side of the firm remains functional, allowing for owners to find the right balance.
“I’ve got two client service officers, an associate, Lillie, who started her professional year, and I’ve also got an undergrad as well,” he said.
“I definitely see the benefit of having a practice manager type role within the business to really help coordinate the workflow.”
Fysh echoed this sentiment, highlighting that business matters should be largely delegated to others within a firm.
“Ideally, responsibilities for running the business should be delegated to others to allow the principal to focus on giving advice. In reality, this doesn’t always happen,” Fysh said.
Shifting from being an adviser to a firm’s principal and owner means a big shift in mentality. Moloney recalled having to wear “10 different hats” when starting his own practice.
However, Moloney also acknowledged this is not sustainable going forward and owners need to understand the benefits of delegating, whether it be shifting the advice or business side of the firm to other employees.
“As we grow, we’re not going to be able to take the business any further if everything’s stuck on my shoulders,” he said.
