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Published on:

24th Mar 2026

Building Capacity for Sustainable Growth

Ryan Nauman hosts Zephyr’s Adjusted for Risk podcast with guest Angie Herbers, founder of Herbers & Company. They discuss growth in wealth management and why capacity—defined as the ability to absorb additional growth without service quality decreasing—is the primary growth engine behind both organic growth and M&A. Herbers distinguishes capacity from productivity, explains why common benchmarks often miss differences in service models, and highlights the importance of the support ratio and investing in advisors rather than excessive support staffing. She argues firms can improve capacity by focusing first on client experience, then organizational and operational structure, and by clarifying a core service to avoid diluted offerings. They also discuss AI’s role in transforming support work and improving response and information quality.

Learn more about Zephyr: https://informaconnect.com/zephyr/?utm_medium=Content&utm_source=Content_Podcast&utm_campaign=YT_Adjusted_for_Risk_&utm_content=YT_Adjusted_for_Risk

Learn more about Herbers & Company here: https://www.herbersandcompany.com/

00:00 Welcome and Guest Intro

01:30 Angie Herbers Background

03:16 Growth Engines and Capacity

05:48 Why M&A Took Off

07:48 Defining Capacity Simply

10:26 Key Capacity Ratios

14:29 Support Ratio Strategy

19:30 Productivity vs Capacity

22:49 Why Capacity Gets Ignored

29:27 Boosting Capacity via Client Experience

35:20 Avoiding Service Dilution

42:43 AI and the Future of Capacity

46:10 Where to Learn More and Wrap Up

Connect with Ryan Nauman:

LinkedIn: https://www.linkedin.com/in/ryannauman1/

X: https://twitter.com/LkTahoeBadger

Transcript
Speaker:

Let's go.

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Ryan Nauman Market Strategist Zephyr:

hello everyone and welcome to zephyr's

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adjusted for Risk Podcast from the shores

of Lake Tahoe I am Ryan Amman the market

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strategist here at Zephyr I have another

great show lined up for us today financial

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advisors must manage a lot of different

aspects of their practice and wear many

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different hats It's arguably their most

important responsibility is growth I

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have on the perfect guest to talk about

all things growth in the biggest growth

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engine for wealth management practices

but first today's episode is sponsored

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by the award-winning Zephyr which helps

investment professionals make more

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informed investment decisions on behalf of

their clients Alright enough from me I've

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already talked enough Let's go ahead and

bring on the star of the show I'd like to

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give a very warm welcome to Angie Herbers

Angie is the founder of Herbers and

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Company Angie thank you so much for coming

on the show It's an honor to have you on

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I'm really excited about this conversation

Can you please tell us a little bit more

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about yourself and Herbers and company

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Angie Herbers Founder Herbers & Company:

Well first, thanks for having me.

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It's a beautiful day in.

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I'm coming from Denver, Colorado,

speaking from Denver, Colorado today.

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So thanks again for having me.

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So Harpers and Company

is a firm I founded.

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More than two decades ago.

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We do business consulting for,

specifically for financial advisory

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firms, wealth management firms.

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In recent years, we've expanded

to accounting firms and most

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adjacent firms to wealth management.

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We do holistic consulting

advice, so we cover leadership.

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Growth, client experience, operations.

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We started and one of our strongest

areas is human capital management

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and, and sales and marketing.

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So, so happy to be here.

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I have a long history in the industry,

so happy to share everything I

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know or everything I can tell you

in the, in the time about growth.

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Ryan: Fantastic Angie I'm gonna pick

your brain a lot over the next 30

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minutes about growth It's an important

topic You in Denver I know you guys

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have had a pretty dry winter two Same

here as Lake Tahoe but I'll be honest

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with you 60 degree weather that we're

getting this week isn't so bad I don't

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mind it We could use some snow though

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Angie Herbers: I mean, I, you know, we got

some snow a couple of days ago and it was

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a welcome snow, but it lasted half a day.

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It is today, it's the beginning of March.

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It's 70 degrees in Denver.

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Not complaining, but you

know, you like the snow.

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I like the snow.

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So hopefully we can get some to

get to the ski slopes, maybe.

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Ryan: I know Angie I completely

agree I'm not gonna disagree with

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the 60 degree weather but it's we do

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Angie Herbers: Makes it hard to ski.

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Yeah.

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Ryan: exactly Exactly So in today's

wealth management environment most turn

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to m and a activity or organic growth

when focusing on growing their business

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And that's what they focus on That's a

lot of conversations I have is usually

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firms are growing through mergers or

acquisitions or really trying to focus

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on organic growth What do you believe is

the biggest growth engine in your view

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Angie Herbers: I think it's important

that we get some history here.

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So I've been consulting since 2003.

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Way back in 2003, the average

size firm was 300,000 in revenue.

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Today the average size

firm is a lot bigger.

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And back then the focus

was on organic growth.

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You know, a baseline focus of

organic growth is capacity.

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And the reason that, you know,

that's one of the number one growth

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engines, or the number one growth

engine, in my opinion, is because

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you can't add clients if you don't

have anyone to service those clients.

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So then years go by, you know, from

:

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know, back when I started consulting,

they gave away firms for free.

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Like they just handed them

to the next generation.

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Well, advisors realize these firms

have value and they can be sold

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and they have significant value.

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So the big hot topic really since

:

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through m and a, but still.

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Even if you acquire a firm, merge

into another firm, get acquired,

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capacity still stays at the

forefront of that growth engine.

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You can't absorb a firm if you don't

have the capacity to absorb it or

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the infrastructure to absorb it.

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You can't grow organically if you don't

have advisors or support or operational

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infa infrastructure to, to grow that firm.

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So I've always been a big proponent of

capacity led advisory firms because at

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the end of the day, if you don't have

the capacity to serve the clients that

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are coming in, or the clients that

you want to come in, or the business

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you want to buy, or the business you

want to, to merge into, their growth

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is going to be much, much harder.

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Ryan: Yeah Angie I think that's fantastic

and we're gonna talk about capacity

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shortly cause I find it really interesting

It's a subject that topic that I don't

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really hear very much Throughout my

conversations but let's go back to I

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love that you brought up the history of

the industry Going back to:

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you think switched like you said back

then firms were just given away here's

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my practice to a younger financial

advisor But what do you think was the

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primary driver that was started The

m and a train that now is so popular

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that you mentioned a few years ago

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Angie Herbers: Having lived

through that time period.

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I mean, the reality is, I don't know,

but I, my guesses are, you know, when

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you look at any consolidation curve,

I don't know how much you know about

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consolidation curves, but you know, it,

new industry is built and then it grows

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up to a certain point, it consolidates,

and then it's either reinvented or, you

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know, it sort of goes on a decline, but.

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Consolidation curves are

driven by consumer demand.

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I went to a CFP registered program.

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I graduated from Kansas

State's CFP program.

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I came into the industry wanting

to be an advisor, and what I

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realized is what we were learning

in school, which is objective.

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Conflict free advice wasn't

necessarily what the industry, the,

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what the whole industry represented.

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It was still, we were still very

much recruited by the brokers.

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But having lived through the, the time

period, both through college and now from

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2000 to, to, or, you know, 2000 to 2010.

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And through the bear market in

:

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we, we want people on our side.

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Ryan: angie I think that was fantastic

A great explanation there on really

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the evolution of this space So let's

go back to capacity for a second You

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brought it up and really why you feel

that you know it's one of the biggest

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growth engines in this space So what is

capacity Let's start at the top What is

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capacity and really how do you view it

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Angie Herbers: well,

capacity is very simple.

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People make it quite complicated

with lots of ratios and analyzing it.

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But capacity at it in its most

pure form is your ability to absorb

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additional growth without the

your service quality decreasing.

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So a simple example is, you

know, I'll make it simple.

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A solo advisor they're working with,

let's call it 50 clients, and you ask

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them, how many more clients can you

work with without something breaking?

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And they might say, I

could work with five more.

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I could work with 10 more.

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Well, in general, that's

the capacity ratio.

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I think people make it hard because.

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There's lots of ratios in the

industry that people look at.

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That's revenue per advisor.

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Revenue per team, clients per advisor,

clients per team, and they think

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that those benchmarks are capacity.

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Well, that's not actually

capacity, because capacity

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is different for every firm.

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No firm has the exact same service model.

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They don't have the exact same

people in the organization.

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Those are simply productivity ratios,

average productivity ratios, they

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tell you nothing about what additional

things you can absorb or what, how

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many more clients you can absorb.

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Before something breaks.

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We like to, in the consulting engagement,

ask our clients that very simple question.

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If you were to double in size or triple

in size or add a hundred more clients or

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add five more clients, what would break?

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And at that point, you know, most

advisors will say, well, this

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process and procedure will break.

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I will break because a leader I feel

like, you know, our support would break.

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There's lots of things that

break, but at the end of the day,

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it's your ability to sustain.

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A high level of service.

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Ryan: Interesting So I you're exactly

right You made it sound so much easier

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than what I think people think of

capacity And I have a lot of questions

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following up on that but let's just

start with those ratios that you

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mentioned Are there different capacity

ratios that financial advisors can

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use and really what is good and bad

ratios or what's a good number what's

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a bad number when you're referencing

those ratios that you just talked about

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Angie Herbers: Well first there are

literally hundreds of thousands of

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capacity ratios because there's all

different types of capacity, right?

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There's leadership capacity,

there's operational capacity,

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there's financial capacity, there

is client to advisor capacity.

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There's.

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You know, we could get into

investment capacity, you could

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get into expansion capacity.

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There's all different types of capacity.

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The the one, the one capacity

ratio that most people will focus

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on is client to advisor capacity.

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So how many clients can one advisor serve?

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Well, we sort of know, and

this has been pretty average

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over the years, if you have.

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What I would call a mid-tier wealth

management model, and one advisor can

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serve somewhere between 60 and 80 clients.

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We also know that if you have good

capacity ratios everywhere else,

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let's just say you have great

processes and procedures, you could

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potentially, those advisors could

potentially go up to a hundred clients.

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Then you team them up so you have

good organizational structure.

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They might be able to go higher.

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Okay.

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Now with all that said, the reason

I was talking about the advisor

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to, to the client to advisor

capacity is because that's what the

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majority of the industry focuses on.

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How many clients can one advisor or

one team serve, or how much revenue

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can one advisor or one team serve?

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And that's really where the industry

stops, but it herbert's a company.

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We're not looking at that ratio first.

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We're gonna look first

at the financial ratios.

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So.

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What is your ability to, to grow,

you have to have some level of

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profits to invest in growth.

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Growth doesn't happen unless

you invest back into it.

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So we're looking at the financial

ratio ratios, which are growth rate

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profits gross profits, overhead expense.

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But second, and this is the,

the one that doesn't get enough

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attention is the support ratio.

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So.

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A support ratio is how many support people

do you have per advisor or per team?

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So if you have a one support person for

two advisors, that's a one to two ratio.

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If you have 10 support per one

advisor, that's a 10 to one ratio.

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We look at the support ratio

because the support ratio is the

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thing that eats away the profits.

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So if you have less profits,

you have less to invest back

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into the business on growth.

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Some people also call the support ratio.

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The support ratio, by the way, is

an advanced capacity ratio, but

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some people also call, call it the

operational ratio, not the same thing.

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That's your ability to actually move

people through a client experience,

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but at the end of the day, there's

no good or bad capacity RA ratios, so

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long as you interpret them properly,

there's only one way to interpret them,

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and that's against your service model.

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There's no benchmark in the world.

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That is going to tell you what your ratio

should be compared to to your service

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model, because your service model and your

people and the capacity of your people

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and the productivity of your people are

different across all advisory firms.

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So if you wanna start mastering capacity,

start with mastering the support ratio.

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And the goal of the support ratio

is to get it as low as possible.

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Ryan: And let's focus on that support

ratio I feel as if that's so important

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like you said because I mean as I talked

at the beginning financial advisors they

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have a lot on their plate They have to

wear a lot of hats so they need support

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But how does a financial advisor might

be a silly question determine what their

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optimal support ratio is right Is it

you know Do they Is it always moving Is

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it a fluid number Is it a fluid ratio

or is it just depend on their practice

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and how many clients they have and how

they feel how much support they need

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Angie Herbers: Well, let's

look at it a different way.

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So.

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Let's just assume that the, the less

number of clients you have, so let's

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just say you have one advisor who's

servicing 50 clients and another

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advisor who is servicing 80 clients,

which one is providing better service?

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We all would probably agree that

the client with or the advisor

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with only 50 clients is probably

providing better service.

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They can respond faster,

they can spend more time with

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the client, they can answer.

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Questions more detailed, right?

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So if that is the assumption,

let's just say hypothetically,

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advisor who has 50 clients adds

another advisor to their team.

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Well, they now can

serve a hundred clients.

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'cause they have two advisors servicing

50 client, or excuse me, 50 clients each.

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So it's a total of a hundred.

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So let's just say, now let's go to the.

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Other advisor, the one advisor

who has 80 clients, right?

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Well, we already know that their

service is not as good as the

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advisor who's servicing 50 clients.

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And that advisor, instead of

hiring another advisor, decides

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to hire a support person, right?

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Well, how many more clients

can that one advisor work with

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by hiring one support person?

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I would argue maybe 10.

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Right.

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Ryan: Okay

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Angie Herbers: So now that client,

that advisor, you have an advisor with

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one support person, and then you've

got another firm who has two advisors.

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That firm with two advisors who who

does most of their support themselves,

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can serve a hundred clients versus the

one advisor who we know is probably

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providing a lesser service 'cause

they're servicing more clients now,

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90 clients with one support staff.

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So they can serve 90 clients

or a hundred clients.

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So if you look at it that way,

which one is building more capacity?

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Well,

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Who's hiring advisors, not

the one who's hiring support.

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Ryan: Yeah

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Angie Herbers: going back to the

support ratio, when you look at

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capacity, a capacity led firm,

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Angie Herbers Founder Herbers & Company:

a capacity led firm is saying

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we're not gonna maximize the number

of clients and advisor services.

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Through adding support, we are going

to give advisors a reasonable amount of

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clients that they can serve very well

and continue to hire more advisors,

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even though some of the support

tasks stay on their plate, right?

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That's what most of the

industry doesn't get.

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What most advisors do is they hire

a bunch of support underneath them.

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That's fine if that's the

way that you want to do it.

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But that's not a capacity led firm that

is a productivity led firm, and I would

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argue that that firm may be actually

hurting their service quality or overall

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hurting their firm's growth because

they're not investing in the people that

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actually expand the capacity the most.

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Angie Herbers: So.

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Ryan: And

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Angie Herbers: I was an advisor who

came out of a CFP register program.

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When I came in the industry, they

didn't know what to do with us, so

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they put us in supporting positions.

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Right.

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Way back at the beginning of my

career, which is why I started the

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consulting business to begin with,

is this idea that we didn't need to

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surround advisors with a lot of support.

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That's not to say they don't need it.

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Eventually they do.

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But we shouldn't be surrounding

advisors with a bunch of administrative

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support or client service support.

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What we should be surrounding them

with is other qualified advisors,

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even if it's the next generation of

talent that isn't smart enough to work

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with clients, yet communicate with

clients and or those support advisors

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can help those other advisors while

being trained to expand capacity.

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So overall, when you look at the support

ratio, sort of going back to your

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question, when you look at the support

ratio, you're s, the idea is to keep

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the support ratio as low as possible.

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If you are a capacity led firm

and you want to maximize growth.

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Ryan: Yeah Angie that is fantastic

I love that answer that that insight

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there to the question back to one thing

that you mentioned there that really

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piqued my interest was your view on

productivity versus capacity I initially

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with you know capacity productivity

very similar You have to have high

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productivity that you know maybe reduce

capacity but is there a difference there

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I thinking of that wrong Should the

two be separate Productivity capacity

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Angie Herbers: Productivity

is not the same as capacity.

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Productivity is what's

happening in the present.

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It's not what's possible.

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Capacity is what's possible.

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Right.

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So let's look at productivity in general.

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Let's just say you have, you're

working with a hundred clients, right?

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And of those a hundred clients, you

know, they average whatever, call

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it a million in revenue, right?

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On paper, you look like a star advisor.

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But you have no ability to grow.

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Let's just say you can't go any

further and you're burning out.

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You don't have time to review,

you know, support work that

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any one might be doing for you.

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You don't have time to

market your business.

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You don't have time to respond to clients

within, call it 90 minutes, right?

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You are super productive, but

there's a cost for being that

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productive and the cost is service.

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Okay?

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Now, on the opposite end

of that, you might have a

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productivity ratio of one advisor.

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They're working with 50 clients,

and those 50 clients are only

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500,000 in revenue, right?

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Compared to.

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The advisor that is sitting over here

with a hundred clients and a million in

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revenue, they look really unproductive,

but they're building capacity or they

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have capacity to grow, or you're hiring

other advisors to add capacities.

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So the point I'm making is, is

most of the time in capacity led

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firms, the productivity ratio is

lower than the, than the average.

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So the goal is to make everybody in

the whole unit more productive and also

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still have capacity to take on clients.

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Otherwise, you hit an inflection point.

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Some people call it a capacity wall.

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Her as a company calls

it a growth barrier.

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You'll hit a barrier where you can't

grow anymore because you haven't

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taken the time to build capacity in

exchange for maximum productivity.

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Humans aren't machines.

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We can build a machine and

maximize productivity and

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capacity at the same time.

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That's not true in professional services.

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There's ways to improve your

productivity and improve your

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capacity, but generally capacities or

productivity is what's happening today.

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Capacity is what is possible.

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Ryan: I love that Angie and we're gonna

talk about shortly about waste firms

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can improve capacity but I love your

descriptions there Makes it Easier to

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understand So during this conversation

I realized how capacity why it's so

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important Why though do you think we

don't hear much about it in the industry

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or there's not much talk about it When

you're talking about growth and future

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growth and growing a practice we're

always talking about m and a and all

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that stuff Why do you think capacity

isn't a hot topic or hotter topic

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Angie Herbers: Well,

one, it's a boring topic.

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Ryan: I don't think so I think this

has been a really interesting topic

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Angie Herbers: Well, I appreciate you

saying that, but for nearly 25 years,

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I've been trying to write capacity and

I can tell you if I write something.

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And the press about m and a.

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I get a lot of looks.

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If I write something about capacity,

I get hardly any emails at all.

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If I write something about marketing,

by golly, it goes through the roof.

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No, I, I just think in general,

capacity's a misunderstood concept

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and it's a complex concept that most.

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Advisory firm owners who are, most

of them are accidental entrepreneurs.

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You know, they didn't take a

business class that talked about

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capacity and capacity ratios.

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They certainly didn't take a

business class that talked about

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how a professional services firm is

built versus a product based firm.

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The majority of businesses

taught around products that you

359

:

sell versus time that you sell.

360

:

So.

361

:

I just think it's an underserved,

in general, an underserved and

362

:

misunderstood topic, and then it's

very difficult to put like a benchmark.

363

:

It's nearly impossible to put a

benchmark around it because in order

364

:

to do that, you would have to have

hundreds to get statistical significance.

365

:

You would have to have hundreds

of the exact same firms within

366

:

nearly the exact same talent in it.

367

:

To figure out what a

capacity benchmark would be.

368

:

So the way you overcome that is you just

default to the productivity ratios and

369

:

you say, okay, well this is what this

firm is doing, versus that firm is doing.

370

:

Last but not least on this topic, I

think there's also a misconception.

371

:

You know, I've worked with thousands

of firms firms from zero in revenue.

372

:

Well above 250 million in

revenue, not assets, revenue.

373

:

So I've seen a lot of the growth track

and what I've come to learn about capacity

374

:

in general is like there is a si there's

a science to it through ratios, but

375

:

there is an art to it through earnings.

376

:

And that takes time to learn.

377

:

So I'll give you an example.

378

:

So as a financial advisor, right,

we could go to all of our clients

379

:

and we could say, Hey, the average

client of your size, let's just

380

:

say it's a million dollar client.

381

:

The average client of your size

spends $350 a month on food, right?

382

:

Would you ever tell a client that?

383

:

Ryan: No

384

:

Angie Herbers: No.

385

:

Right, because that client might

enjoy food and have a higher budget.

386

:

They might be more frugal and stay

at home and shop at other places, you

387

:

know, might not shop at Whole Foods,

and they might be something different.

388

:

You wouldn't use those

ratios with a client.

389

:

But our industry seems to think

because it is an evolving industry,

390

:

that the benchmarks apply to all

firms of all sizes, and that's

391

:

making a wrong assumption.

392

:

They're making the assumption

that everybody's offering the same

393

:

service just because they charge

the same, and that's not true.

394

:

I can tell you.

395

:

That I have seen firms who, what I

would consider investment management

396

:

only firms, they're charging the exact

same amount in an A model or a flat

397

:

retainer model that firms are, who are

servicing their clients at the highest

398

:

level, doing things that are more what

I would call family office or concierge

399

:

services for the exact same price.

400

:

So fundamentally.

401

:

Most of the ratios and most of the,

the benchmarks in our industry as

402

:

they have evolved, did not consider

the evolution of service models.

403

:

So, you know, I'm going on a little

bit of a tangent here, but I, I believe

404

:

that over the last 25 years that I've

been in the industry, one capacity

405

:

was, you know, thought of as the

same thing as productivity and then.

406

:

The benchmarking studies perpetuate it

without proving it in the service model.

407

:

Ryan: Yeah

408

:

Angie Herbers: Not to mention EV

advisors are advisors are looking at

409

:

numbers that are of the same equivalent

for their business that they would

410

:

never tell their clients, right?

411

:

Every business is different.

412

:

Every person in the business is different.

413

:

Every service model in

the business is different.

414

:

And the only benchmark you can use

is to benchmark against yourself?

415

:

Ryan: No you're exactly correct

and great explanation there because

416

:

I've never seen two financial

advice firms that are the same

417

:

Angie Herbers: No, not even close.

418

:

Ryan: Yeah exactly

419

:

Angie Herbers: I mean, they all charge

the same, which I suppose could be a

420

:

good thing or could be a bad thing,

but the, you know, the bottom line

421

:

is, is the service is different.

422

:

The people are different.

423

:

The numbers that you have to find, which

is a lot of the consulting that we do,

424

:

we help people find their benchmarks.

425

:

Comparing those benchmarks year after

year to progress in your own benchmarks.

426

:

If you've focused on that, you know

that alone will put you so much

427

:

further ahead in a capacity led firm.

428

:

Ryan: Yeah How can firms improve capacity

Is it just by employing technology or

429

:

just working harder Adding people adding

like you said financial advisors What

430

:

are some examples of improving capacity

431

:

Angie Herbers: I don't get this

question very often, but I'm glad

432

:

that you asked it because it's a it.

433

:

I will be very frank with you.

434

:

It is.

435

:

The number one issue that we see in

a lot of the firms that we consult.

436

:

So in general, all financial advisory

firms think they're the best.

437

:

Right.

438

:

They believe that they're the best, and

I'm not gonna be the one to tell them,

439

:

Hey, like, I've seen a hundred other firms

and I think that they're better than you.

440

:

Right?

441

:

Like, if you believe you're the best, I

want you to believe that you're the best.

442

:

But that mentality is actually

a leadership capacity issue.

443

:

It's the leader of the firm saying, we are

the best at what we do, and therefore we

444

:

should not improve our client experience.

445

:

Okay, so if you believe that, then

your next thought in improving

446

:

capacity is organizational structure.

447

:

So you would go to organizational

structure and then you would

448

:

go to operational structure.

449

:

So processes and procedures.

450

:

Okay.

451

:

Here's the secret though.

452

:

Most firms reach out to our consulting

firm because they want organizational

453

:

strategy or they want operational.

454

:

Infrastructure or they want

marketing infrastructure.

455

:

Those are the user, usually the three

things that they reach out for, unless

456

:

they wanna sell their firm and then

they're in the m and a division.

457

:

But the po the point that I'm making

is, is rarely, if ever do we have a

458

:

firm reach out and say, Hey, we wanna

implo improve our client experience.

459

:

And the reason that is, is because

most firms assume that it is the best.

460

:

But the client experience is

where you gain the most capacity.

461

:

And in today's environment, it is where

you can gain even more capacity with ai.

462

:

So the point that I'm making is the,

the first step is client experience.

463

:

The second step is

organizational structure.

464

:

And the third step then

is operational structure.

465

:

But that's not how most leaders.

466

:

Look at it.

467

:

They look at organizational

structure, operational structure,

468

:

and the marketing structure.

469

:

The fact that they don't first

think about client experience

470

:

is a leadership capacity issue.

471

:

So the bottom line is, is if you never

stop thinking about your client, experie.

472

:

How it can be improved, how it can be

more efficient, how you can make advisors

473

:

happier, how you could decrease the

amount of work that advisors are doing

474

:

so that their judgment is the best.

475

:

If you do all of those things through

the lens of your client experience or

476

:

your client journey, or the services

that you are providing your client,

477

:

if you stay there, a lot of the other

areas, they won't fix themselves, but

478

:

they fall in place a whole lot easier.

479

:

It is rare that we have a firm that

comes to Herbers and Company and says,

480

:

we want to improve our client experience.

481

:

They will say, we have staffing

issues, we have marketing issues.

482

:

We wanna merge or sell.

483

:

But if I could change anything

about the industry, it would

484

:

be, you aren't the best.

485

:

Just assume that and you

might become the best.

486

:

Ryan: Yeah Angie that I that comes as a

surprise to me We talk so much like at

487

:

Zephyr how do you improve that client

experience Whether that's in we're on

488

:

the investment side but that's through

client reports making a personalized

489

:

customized client reporting you know

giving them that white glove experience

490

:

in terms of personalization But it's

interesting that isn't number one when

491

:

looking at the overall structure that

surprises me I'm really glad you brought

492

:

that up because to me client experience

it all starts there and ends there

493

:

Angie Herbers: Right.

494

:

It's the product you're selling

is the client experience.

495

:

Ryan: Yeah

496

:

Angie Herbers: That

hasn't been my experience.

497

:

I can tell you it is.

498

:

I just had this issue

last week trying to get.

499

:

Advisory firm leaders, and I've seen

this in small firms to very, very

500

:

large firms, to turn their whole ship

and focus solely on client experience

501

:

is not, is not something that they,

they can do because they feel like

502

:

they have all of these other issues.

503

:

People issues, marketing issues, people

breaking processes and procedures,

504

:

or a lack of a process and procedure.

505

:

All the way over on the

business things, what I would

506

:

consider all those micro issues.

507

:

But if you take a step back and you solve

the macro issue, which is how are, can

508

:

we always improve the client experience?

509

:

And you stay really focused on that,

whether it be the investment management,

510

:

the operations, the, you know, how

advisors are servicing clients,

511

:

how they communicate with clients.

512

:

If you stay focused on all of

that again, all the other stuff.

513

:

It comes a lot easier.

514

:

We just see a lot of advisors.

515

:

In fact, I had one in a prospective

meeting month ago who said,

516

:

you know, I think our client

experience is really great.

517

:

We just have people issues.

518

:

And I'm like, if you have people

issues, you probably have a client.

519

:

It's experience issue, right?

520

:

Like

521

:

It all stems from one place.

522

:

If the product is broken,

everything else is broken.

523

:

Ryan: Yeah Angie that's fantastic I

think that's great Some great insight

524

:

there Let's real quickly talk about

the services that a firm can offer and

525

:

adding people trying to improve capacity

but lot of times you can also by adding

526

:

services or maybe adding people you run

the risk of diluting services How can you

527

:

continue to grow without diluting services

528

:

Angie Herbers: Well, if you run

into the issue of diluting services

529

:

then your, your service model

was broken to begin with, right?

530

:

Ryan: Okay

531

:

Angie Herbers: So think about it this way.

532

:

Would you go out into a, I'm gonna put it

in terms of t-shirts 'cause it's easier

533

:

to see than it is to talk about this, you

know, intangible that most advisors offer.

534

:

So what's better to have four t-shirts

for different types of t-shirts and

535

:

try to sell that to the marketplace?

536

:

Is it easier to sell four different types

of t-shirts or is it easier to Perfect.

537

:

One T-shirt.

538

:

Let's call it the purple t-shirt

and sell one purple t-shirt.

539

:

Well, it's almost always better to start

with perfecting the purple T-shirt, right?

540

:

That's not what advisors do,

what advisors do, and it's, it's

541

:

not their fault actually, it's

just how the evolution happens.

542

:

Think about an advisor

who's starting today.

543

:

They start today and they're going out

and they're taking in any and every client

544

:

that they possibly could take in, like

they're building their business, right?

545

:

So it doesn't matter

the size of the client.

546

:

Well then they get to a capacity wall

or growth barrier and our opinion, and

547

:

they start to then segment services.

548

:

At the same time.

549

:

They start to focus on like a niche.

550

:

Well.

551

:

That's all great, like you can do

those things, but now you're actually

552

:

selling three different types of

services without perfecting one, right?

553

:

What if you go back and you

say, Hey, forget about all the

554

:

services that I'm offering now.

555

:

I had to make a mess in the

kitchen to get up here, right?

556

:

Like, it's okay, but I'm gonna clean up

this mess I've made of having lots of

557

:

different people on different services

and lots of people in different segments.

558

:

You wouldn't believe the client

segments that we've seen.

559

:

We've seen like client segment,

a, client se segment, A one A

560

:

two, A, three B, you know, like

hundreds of different segments here.

561

:

The point being is, is if you go back

and you look at your service model

562

:

and you say, not what is my core

client, but what is my core service?

563

:

Like, what does everybody get no

matter what type of client they are?

564

:

In this firm, what is that core service?

565

:

If you find that core service, you'll

find that you don't have to have

566

:

hundreds of different segments, and

you can perfect the core service.

567

:

From the core service.

568

:

Then you can repackage it for different

types of clients, which becomes segments,

569

:

and then within those segments, then

you could start offering ancillary

570

:

services, business consulting,

whatever, tax advice, whatever it is.

571

:

The problem is, is most advisors don't

take the time and or they can't wrap their

572

:

brain around because of how the, their,

the evolution of their business happened.

573

:

They can't wrap their brain around

creating and perfecting the core service.

574

:

So everything out here ends up

becoming diluted because there is

575

:

no nothing that, there's no North

star that pins everything back to.

576

:

So you just have a bunch of services,

and when you have a bunch of

577

:

services, I want you to think about

management of your company, right?

578

:

When you have a bunch of services that

are disconnected, or a bunch of services

579

:

that aren't pointing back to some

North Star, the management capacity,

580

:

which is by the way, when something

breaks, you have to go manage it, right?

581

:

The management capacity in

your organization increases.

582

:

So every advisor out there will

understand this, or every business

583

:

owner out there will understand this.

584

:

You're a solo shop.

585

:

You have like the perfect little life.

586

:

You're working with 50 clients.

587

:

You actually become successful.

588

:

They start referring clients.

589

:

You build some operational

infrastructure, you add some

590

:

people, and now all of a sudden.

591

:

You're man, you're spending 20

to 30, maybe even 40% of your

592

:

time managing all these people.

593

:

Well, the reason that happens, so you

increased your management capacity.

594

:

The reason that happens is because your

service models are still very disjointed.

595

:

So.

596

:

In an ideal world, again, this is ideal,

we're building airplanes in the air.

597

:

Like if, if I had like the perfect

steps that you would take throughout

598

:

the process, which never happens,

these are, I mean, I'm telling you

599

:

the perfect steps, but the point I'm

making is when management capacity goes

600

:

high, you don't often add more people.

601

:

You can to speed it up.

602

:

Speed up.

603

:

The infrastructure building.

604

:

But at the end of the day, you

want your management capacity

605

:

to go down less management.

606

:

And the way to do that is to get

solely focused on a core service.

607

:

Once that's clear, a momentum

builds a growth, momentum builds,

608

:

and then you start expanding out.

609

:

So diluting service, as counterintuitive

as this sounds, diluting services.

610

:

Often happens when you have

too many services, so you have

611

:

a lot and nothing done well.

612

:

Ryan: Yeah Angie that's great And I

there's a ton of sayings out there I

613

:

think what it is you know do you wanna be

spread Across miles and miles or do you

614

:

want to go much deeper into one subject

much more narrow I think there's a lot of

615

:

different ways of saying it I'm probably

butchering it right now But you know the

616

:

you're exactly right Focus on what you're

really good at right Instead of offering

617

:

trying to be the master of all things

618

:

Angie Herbers: right.

619

:

Ryan: So

620

:

Angie Herbers: say in the consulting

relationship, or when we train

621

:

consultants, we tell them, if you're

going wide before you're going

622

:

deep, you're gonna create more

problems out there for those firms.

623

:

Don't go deep and then go wide

and you'll, you'll have more.

624

:

Oppor, usually you have more

opportunities for growth.

625

:

Now there's always like the

people who surprise you and they,

626

:

they thrive in the chaos, right?

627

:

But, but the,

628

:

Ryan: Not me Angie

629

:

Angie Herbers: oh gosh.

630

:

The best practices get focused on one.

631

:

I mean, there's no way to make it

perfect, but you at least have a

632

:

core North star you're going toward,

and then you branch out from there.

633

:

Ryan: Fantastic All right Angie you

can't really you mentioned it you

634

:

mentioned ai I love that we got through

this conversation Really haven't talked

635

:

much about it but it's tough to have a

conversation about practice management

636

:

building a strong practice efficiencies

without talking about ai What role

637

:

does AI play in improving capacity

638

:

Angie Herbers: History

gives us that answer.

639

:

I, I think it's funny when the industry

says, you know, AI is gonna get rid of

640

:

the mid-size firms or the small firms,

or it's gonna get rid of the support

641

:

people or decreased administrative

people on it, it might do that, but

642

:

I want you to go way back in time when

the calculator was invented, okay?

643

:

Prior to the calculator, inventing

being invented, the independent

644

:

advisory industry was slow, if not

stagnant, not really growing at all.

645

:

The calculator was invented and now

consumers could run their own numbers, and

646

:

all a sudden we had this judgment culture.

647

:

Okay, so they were hiring financial

advisors to give them judgment and then.

648

:

We get into the nineties sort of

when I started to consult maybe even

649

:

slightly before that, and judgment

became about judgment plus trust.

650

:

Like I need you to be legally obligated

to give me advice and my best interest.

651

:

AI is going to do the exact same thing.

652

:

It is going to re reinvigorate the

invention of the calculation only.

653

:

Judgment is going to be about filtering

out information, being able to look

654

:

at data in a different way, and

when we look at the support ratio.

655

:

So I don't think, I don't think in the

future, like the administrative roles

656

:

and the client service roles are going

to be as important as they are now.

657

:

I think those roles are

going to transform into.

658

:

How do I, how do I filter

out all of this data?

659

:

Because I think AI is gonna do a

lot of the support roles, but they

660

:

aren't going to eliminate them.

661

:

They're just going to transform them.

662

:

That's what I think's gonna happen.

663

:

You know, I can't pre predict the

future, but we are starting to

664

:

see a massive, you know, evolution

within advisory firms with ai.

665

:

In response times to clients, better

information to to clients, more

666

:

informed clients, so deeper personal

conversations and regarding the support

667

:

we're seeing, support roles not being

eliminated, but rather being upskilled.

668

:

I hope that all of the support talent that

comes into the industry in the future.

669

:

We'll transform into financial

advisors because I think we're going

670

:

to need a whole lot more of them.

671

:

So those are the things

we're seeing right now.

672

:

Ryan: Yeah I completely agree with that I

think AI can help support it's not gonna

673

:

remove but make the financial advisor

better but also the support team better

674

:

by providing them like you said with

data Maybe more efficient work workflows

675

:

where then the support people or the

financial advisor can do what's most

676

:

important And that is responding to a

client focusing more on that relationship

677

:

building that ai I don't think is gonna

be to do so I completely agree thank

678

:

you so much for coming on the show and

talking about capacity I loved it I think

679

:

it was really fascinating I learned a

lot as like I said it's a subject that

680

:

we don't often talk about so it was

great Where can our audience get more

681

:

information about Herbers and Company

682

:

Angie Herbers: Well, first,

thanks for having me.

683

:

It was a fun conversation.

684

:

I don't get to talk about capacity

all that often because it's not,

685

:

it's sometimes it's a boring topic.

686

:

But thank you for having me, for anyone

who wants help from hers and company.

687

:

We are an independent objective

consulting firm to the industry

688

:

for the last two decades.

689

:

And you can find us@herbersandcompany.com.

690

:

Ryan: Fantastic Awesome Angie Thank you so

much and thank you everyone for listening

691

:

to this episode of zephyr's Adjusted

for Risk podcast You can watch all of

692

:

our other podcasts on the Zephyr YouTube

channel and Spotify Please be sure to like

693

:

and subscribe to those channels and give

us a follow on LinkedIn Thank you very

694

:

much and have a great rest of your week

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About the Podcast

Adjusted for Risk
Your weekly guide to timely market analysis, investment strategies, wealth management tips, and engaging discussions to empower investment professionals
Hosted by Market Strategist Ryan Nauman, Adjusted for Risk brings together financial markets, investments, economics, wealth management, and life to help investment professionals make sense of what's happening—and prepare for what's next.

Ryan sits down with industry leaders, investment experts and thought leaders to explore the trends driving markets and influencing investor behavior, from ETFs and SMAs to portfolio construction, AI, the economy, and the evolving wealth management industry.

Expect insightful conversations, actionable ideas, and a fun, engaging approach to the topics that matter most to financial advisors, wealth managers, portfolio managers, and investment professionals.

Cut through the noise. Gain perspective. Make more informed investment decisions.

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About your host

Profile picture for Ryan Nauman

Ryan Nauman

As Zephyr’s Market Strategist, Nauman provides thought provoking analysis and research on market trends across asset classes, sectors, and regions to help empower better asset allocation strategy decisions. His ability to navigate complex market dynamics and identify emerging trends has made him a trusted voice among investors and industry professionals alike. He is an accomplished investment strategist who has spent the last 22 years in the investment management industry ranging from working with plan sponsors, managing the investments of retail investors, and providing actionable thought leadership to investment professionals.
Ryan Nauman is the host of the popular Adjusted for Risk and Inside SMAs podcasts. He is a well-respected investment industry strategist regularly featured on Charles Schwab Network, Yahoo! Finance, Bloomberg TV, Bloomberg Radio and Chuck Jaffe’s Money Life podcast. His opinions and market expertise have been published in Reuters, CNBC, Bloomberg, MarketWatch.com, Yahoo! Finance, and the Wall Street Journal.
Prior to joining Zephyr, Nauman served as lead Investment Manager for a large financial planning practice. He also spent several years as an investment analyst conducting manager due diligence and creating mutual fund lineups for over 100 Plan Sponsors while overseeing $1 billion in defined contribution plan assets.