Senior Wealth Advisor explains how turning a practice into a business has helped build a practice that lasts
Cresco Wealth Management sees itself more as a business than a practice, purely by function of its size. Cresco, which is affiliated with Wellington-Altus Private Wealth, comprises a team of six investment advisors, a dedicated wealth planner, an associate advisor, and two operations/marketing professionals supported by a concierge team of four. That scale gives Cresco the capacity to outlast any one advisor, setting the business up well for the ongoing issue of advisor retirement and succession.
Peter Kollias, Senior Wealth Advisor and Portfolio Manager at Cresco, explains that the decision to build a business, rather than a practice, was intentional on the part of founder Dean Bradshaw and his partners. Kollias explains how that approach has made advisor succession into a smoother process. He notes, though, that size alone does not create this smoother process. It takes dedicated and purposeful planning, recruitment, and retention strategies to ensure a business like Cresco can last beyond its advisors.
“You have to work in the business and on the business at the same time. We have to pull back and look from a 3,000 foot view and say okay, where is this business heading,” Kollias says. “In my mind, the goal is to be redundant as an individual advisor. As hard as it is to say that, we have to put our egos aside and we all have to work to be redundant. That's the mantra that we work with. And so by being redundant, that means is that we've created this entity that works even without us as individuals. And if we depart, we know that our clients are going to be looked after.”
Building that redundancy means retaining talent. Kollias notes with pride that the Cresco office features the faces of individuals with 10, 15, and 20 years working there. Handing clients off from a retiring advisor to their successor begins with ensuring that the succeeding advisor has the same philosophy as the retiring advisor. Kollias notes that his team recruits and retains based on that idea of cultural fit, especially in commitment to customer service. Those new recruits are introduced to clients early on, so that when older advisors retire there is an existing relationship that can form the basis of the client transition.
The recruitment process, Kollias explains, can take between three and six months as the Cresco team seek to really find if a new recruit shares their philosophy and mindset. Kollias notes that the advisors they recruit can come from highly diverse backgrounds, be they restauranteurs or former NHL players, so long as they share that commitment to customer service.
When advisors have retired at Cresco, Kollias explains that communication has been essential. Clients will normally be informed of that advisor’s plan to retire as much as five years before the target retirement date. Over the following years that advisor, their successor, and their clients will talk about the next steps. Introductions will be made and plans will be set so that when the advisor does retire there is no concern for clients or for the rest of the Cresco team. Kollias notes that this is a natural outgrowth of advisors’ capacity to build plans, they’re just turning those planning skills on their own business.
Those plans are also updated and discussed frequently. Kollias explains that the partners at Cresco will meet monthly to discuss issues like retirements and succession. They will also leverage external counselling services provided by their firm to help with succession plans and recruitment. Doing that work, though, takes a degree of bravery and self-reflection, an acknowledgement that the individuals working in and even leading the business will one day leave it.
While not all advisory practices have set themselves up as a business the way Cresco has, Kollias notes that there could be an opportunity to make that change if CIRO’s promises of advisor incorporation are realized. Incorporation, he says, may shift the economics to better support retiring advisors and give them new avenues to build succession plans, though Kollias notes that his own practice is still unsure if this will be possible.
While many advisory practices lack the bench strength that a team like Cresco can pull from, Kollias is confident they can still secure their succession before it’s too late. The key, he argues, lies in self-awareness and planning.
“Find one individual, maybe two individuals, develop your core values, understand what your purpose is, and then find that piece of alignment. Be picky and be patient,” Kollias says. “When the time comes, put that retirement plan in place and you’ll be confident in knowing that this will work for your clients and the advisor succeeding you. The goal is that your student becomes your teacher. It takes a lot of effort, and you’ve got to put your ego aside, but that’s what has to happen.”
