Kitces & Carl Ep 71: When You Want To Delegate But Don’t Want To Manage

Kitces & Carl Ep 71: When You Want To Delegate But Don’t Want To Manage

Running a solo financial advisory firm means the owner has to oversee all the tasks required to run the firm. Owners who want to keep their firm as a ‘lifestyle practice’ can consider hiring team members or using outsourced solutions to complete the tasks that the owner either dislikes or are time consuming. However, these firm owners might worry that the extra work that comes with managing employees might detract from their flexibility and ability to maintain a lifestyle practice.

In our 71st episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how firm owners can approach the hiring decision by first considering their own goals and then deciding what kind of assistance they need to maximize their freedom while maintaining a healthy business.

The first step for the firm owner is to be clear on what they are trying to build with their business. This introspection can help identify whether the owner’s actions sync with their goals or whether they are trying to mimic other firms. This exercise can also draw out exactly what makes the firm owner happy, which for many owners is sufficient flexibility between their professional and personal lives.

Firm owners can then prioritize their wide range of responsibilities. They can consider which of these tasks do not actually need to be done or can be completed more efficiently to free up space in the firm owner’s schedule. For some advisors, this could mean extending the interval between investment performance reports, while others might look for ways to avoid being bogged down in email during the day. After clearing up space in their schedules, firm owners might find that they can achieve their lifestyle goals while remaining a solo practice!

For tasks that are left and that the firm owner does not want to do on their own, the owner can choose to hire an employee or outsource the task. Hiring the first employee does not necessarily mean the firm owner will have to spend more time in the office working together with the new hire or groom them to take on ever-increasing responsibilities. Technology provides opportunities to hire fully virtual employees and firm owners might be surprised to find out that there are many potential candidates who would thrive at the tasks the owners do not enjoy doing themselves!

Another option is to outsource the unwanted tasks, potentially through a part-time virtual employee, or by tucking into a larger firm that can handle back-office responsibilities. This can allow the firm owner to spend more time on client-facing activities, which are often more enjoyable for the owner.

Ultimately, the key point is that firm owners should consider their own goals and their unloved, but necessary, tasks before making the decision on hiring a new employee or outsourcing the work. And while not all firm owners want to run a lifestyle practice, prioritizing the most important work processes and getting rid of those that are not productive is a helpful practice for any advisory firm!

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