Ep 362: Developing Associate Advisor Compensation Plans And Career Tracks To Scale Capacity Past $1.5B AUM with Jeff Brown
Dec 5, 2023
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Jeff Brown, President of Stratos Private Wealth, discusses his firm's innovative career track system for junior advisors. They focus on generating leads for advisors, performance indicators to guide career progression, and growth tactics like referrals and acquisitions. Jeff also reflects on his journey from a wirehouse to embracing supported independence and shares career lessons and the importance of setting ambitious goals.
Stratos Private Wealth has a well-defined career path for associate advisors with three levels of progression based on specific tasks and responsibilities.
The firm focuses on generating referrals and organic growth through content creation, word-of-mouth, and COI referrals.
Associate advisors at Stratos Private Wealth receive base salaries, performance bonuses, and net new money bonuses to motivate performance and provide clear pathways for career progression.
Stratos Private Wealth invests in marketing initiatives and is developing a custodial referral program to diversify lead sources and build a sustainable, scalable business model.
Deep dives
Associate Advisor Career Progression
In the financial advisory firm, Stratos Private Wealth, associate advisors have a clear career path with three levels of progression. At level one, they work closely with lead advisors, drafting and updating financial plans with oversight. At level two, they have more autonomy in plan creation, and at level three, they no longer need oversight. These levels are based on specific tasks and responsibilities, including client interaction, financial market knowledge, and teamwork. Performance reviews are conducted three times a year, with bonuses tied to average scores. While the career progression timeline can vary, the goal is to move through the levels in around four years, with successful completion of the CFP certification along the way.
Acquiring New Clients and Growth
Stratos Private Wealth focuses on generating referrals and organic growth to attract affluent clients, especially from nearby companies like Qualcomm and biotechs. They create content, including videos and articles, on specific strategies relevant to their target audience, such as Mega Backdoor Roth conversions. This content is distributed through social media, particularly LinkedIn, and shared on their website. They also emphasize the importance of word-of-mouth referrals and COI referrals. While client referrals drive most of their growth currently, they are investing in marketing initiatives, hiring a marketing professional, and developing a custodial referral program to diversify their lead sources and institutionalize lead flow.
Associate Advisor Compensation and Bonuses
Associate advisors at Stratos Private Wealth receive base salaries ranging from $65,000 to $120,000 based on level and experience. Their performance is evaluated three times a year using a rating scale of one to five, with three being satisfactory. These ratings determine the bonus percentage, which is paid out as a portion of their base pay. Associate advisors also have the opportunity to earn a net new money bonus based on the estimated first-year fee attributed to their business development efforts. The bonus is split between the lead and associate advisor involved. The compensation structure motivates performance and rewards business development while providing clear pathways for career progression.
Conclusion
Stratos Private Wealth offers associate advisors a clearly defined career path with three levels of progression. Their compensation structure includes base salaries, performance bonuses, and net new money bonuses. The firm focuses on generating referrals and organic growth, while also investing in marketing initiatives and developing a custodial referral program. This approach allows them to attract affluent clients and build a sustainable, scalable business model.
Building a Successful Advisory Firm
The podcast episode explores the journey of a financial advisor in building a successful advisory firm. He shares his experiences, insights, and lessons learned along the way.
Different Paths to Success
The episode highlights the variety of approaches and strategies advisors can take to achieve success. It emphasizes the importance of thinking big and exploring different possibilities.
Defining Personal Success
The podcast delves into the personal aspect of success, encouraging advisors to define success beyond financial achievements. It emphasizes the importance of having a well-rounded perspective and considering various aspects of life.
Jeff Brown is the President of Stratos Private Wealth, an RIA based out of San Diego that oversees nearly $1.5 billion in assets under management for over 350 households. Jeff's firm stands out for its innovative career track system, which features well-defined performance indicators across three levels to systematically guide junior advisors toward becoming lead advisors. This unique structure not only clarifies the path to leadership, but also fosters the firm's ability to cultivate senior advisors from within.
Listen in as Jeff discusses his firm's strategy of generating leads for advisors to enhance client retention and explores their unique performance review system alongside growth tactics like client referrals, content creation, and acquisitions. Jeff also reflects on his journey from a wirehouse to embracing the supported independence of Stratos Wealth Partners, the pivotal career lessons from a challenging partnership breakup that now guide his approach to forming partnerships and operations agreements, and the importance of setting ambitious goals early in one's career.
