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Build Capacity by Engaging Your Staff

Build Capacity by Engaging Your Staff

The top firms are creating capacity to better serve clients, widen service menus and generate new lines of business.

As I’m out helping firms think about technology and scale decisions, a common question comes up in the conversation:  “If we develop capacity, and can do more with less, won’t our staff worry about losing their jobs?”  As advisors continue to integrate more technology into their practices, this concern is on the rise.

There’s no doubt competitive pressures are growing within our industry.  There are concerns around digital advice providers compressing fees and margins; the potential for increased costs of regulatory oversight; and the aging advisor population.  For all the perceived challenges, there’s also an immense amount of opportunity with the overall shortage of advisor talent needed to serve the increasing retirement needs of the baby boomer generation. 

The top performing firms are realizing that the only way to meet these market place challenges and opportunities is not by eliminating staff, but engaging them to help build their respective firm into the future. The top firms are creating capacity to better serve clients, widen service menus and generate new lines of business. 

According to an independent study completed by Aite Group, RIA Productivity and Profitability: Integration Pays (1) “Staffs at firms that boast some level of integration spend 32% less time on operations processes than do staffs at firms that lack integration, despite having similar team sizes. For each staff member, this frees up close to 40 work days annually that can be dedicated to other more value-added activities such as client prospecting and management.”  Based on these findings, the opportunity for staff to thrive, learn and grow increases in an integrated work environment.


Do We Have a Capacity Issue?

Leading custodians and consulting groups have produced useful benchmarking studies that can help answer this question, but I tend to put more weight on things advisors can miss as they are busy serving their client needs:

  • Cultural Shift:  Whether the rules of the game are stated or not, firms tend to have their own culture around work life balance and staff work expectations.  Firms need to be careful when habits are deviating from its common culture.  I worry when firms tell me they are extremely focused on encouraging a work life balance and we start to see a spike in late night emails or weekend activity.  We tend to realize there’s an employee engagement issue or the firm has outgrown its current capabilities.
  • Service Standards Slip:  When you visit some of the most respected firms in our industry, a common denominator is a very clear internal and external communication of service standards. If these firms see a slippage in service standards, they adjust.  You need to draw a line in the sand.  Are responses to queries now going out the next day, when they used to go out within a few hours? Did you previously send meeting materials 48 hours in advance, but now you carry them with you?
  • Ignoring the Business:  One of the biggest mistakes I see in firms is not treating the business like a client.  When internal meetings are often being cancelled for client obligations or other workload matters, it’s a sign that something has to change.  The best firms treat their business as a client. 
  • Misaligned Time:  Most people think they know where they are spending their time and they don’t.  Are you spending your time on the wrong activities?  Take your calendar and assign colors to the four functions you perform the most. After two to four weeks, print out your calendar and look at the distribution of colors.  Encourage your staff to do the same.  I bet you will find a surprise or two in what you see. 


How to Begin Adding Capacity

If you determine that your productivity is suffering because you and your team are working at full capacity, it is important to identify where, and how, you might improve efficiency:

  • Listen to your people:  they know where the bottlenecks are. Offer incentives, such as bonuses, for solutions that build capacity without adding head count.  It’s amazing how everyone believes they are at capacity when they don’t have to pay for the additional headcount.  Tie increased productivity to what employees want:  more time off, trips or increased pay.
  • Solve for the 80 not the 20:  I see inefficient firms make the mistake of building their processes around the most complex clients as their focus tends to be on this group.  Add technology and build processes that work for the largest percentage of your accounts. If you then have to create work-arounds for the rest, so be it.
  • Insource vs. Outsource:  the best firms are extremely clear on their client value proposition.  They build their capabilities in a way that maximizes their focus on the things client expect.  They outsource everything else.


When creating capacity is seen as not only strengthening the firm as a whole but also as making individual work lives more enjoyable,  advisors gain an important benefit: the support of an engaged and energized work force which fuels a firm’s growth.


(1) “RIA Productivity and Profitability: Integration Pays”, Aite, Study completed specifically for Envestnet, June 7, 2013


Jay Hummel is Senior Vice President of Advisory Services at Envestnet, Inc.


The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Envestnet, Inc.  its affiliates or its employees. The information set forth herein has been obtained or derived from sources believed by the author to be reliable. However, the author does not make any representation or warranty, express or implied, as to the information's accuracy or completeness.​

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