How to Minimize “Key Person Dependency” to Boost Value

Video Transcription

How often do you evaluate your business for concentration risk amongst clients? Do you take the same approach to your own human capital? Given that wealth management is one where human capital rules the day, perhaps this should be of equal focus.

Here’s a quick litmus test to help you identify any key advisory dependencies in your business. First, does your company have individuals who, should they no longer be with the business, constitute a significant portion of new clients or clients served? If so, to what extent would their absence disrupt the business?

If you’re like most of our clients at least one person came to mind, and maybe it’s you, so here’s a few strategies to consider. One, prepare for planned and unplanned leadership transitions by having a detailed perpetuation plan. Number two, focus on human capital strategy that has a layered leadership structure and age distribution amongst your advisers. Three, hire not just to create immediate leverage for yourself,  i.e. farmer or service focused advisers, but also to replace that business development aspect, or more of that hunter mindset.

Reach out to me or our team here at MarshBerry if you’d like to identify ways you can plan to stabilize your business and increase its overall enterprise value. We’ll add a link below that you can click on if you’d like to connect. Thanks for watching.