The Science of Scale For Financial Advisors

What is the most expensive input that financial advisors must have to run a successful practice? Perhaps:

• Educational degree or professional certification? Obtaining these can be expensive but may establish credibility, help an advisor to understand a client’s complex financial picture, and improve their ability to provide sound advice.
• Office space? An office in a prime location can be costly, but it can instill confidence for a client that the advisor is well-polished and professional, while also serving as a hub for meetings and team collaboration.

While both of examples above are important, I would argue they pale in comparison to another input much more valuable for financial advisors who want to get the most out of their practice: time.

Time is the Great Equalizer for Financial Advisors

A degree or professional credentials can be huge but is not strictly required. We have observed advisors with unrelated degrees (or none at all) excel. Likewise, a well-appointed office has the potential to pay large dividends, but we have seen advisors who work from their home office also do well.

On the other hand, time is the most precious (and limited) commodity, as well as the great equalizer. One of the biggest challenges for advisors in optimizing their time is how to scale this inherently finite resource.

On that note, a great book that has been recently sweeping through the team at Blueprint Investment Partners is called “The Science of Scaling” by Benjamin Hardy and Blake Erickson.

In it, Hardy and Erickson present a framework for accelerating business growth, not by working harder but by shifting:

• How you think
• What you tolerate
• Where you focus

Linear Growth Kills Financial Advisory Practices

Hardy and Erickson argues that linear growth kills, since businesses that don’t scale quickly often stagnate.

The book centers on a three-part model:

1. Frame: Setting a goal so audacious it forces clarity and filters out distractions
2. Floor: Deciding what you will no longer accept – raising standards, eliminating weak elements in your business, and pruning what doesn’t serve your goal
3. Focus: Channeling your energy into the few high-leverage activities, systems, and people that truly scale

Hardy and Erickson also emphasize compressing time – putting tight deadlines on bold goals to force action and rapid evolution. He illustrates the model with case studies of companies that grew 10-100x in a few years.

Ultimately, the book’s message is that scaling isn’t just a business tactic – it’s about becoming the kind of leader and building the kind of organization that inevitably scales.

An Opportunity for Financial Advisors to Align with an Uncommonly Great Partner

This book resonates with us at Blueprint Investment Partners for multiple reasons:

• It addresses a topic that repeatedly emerges in our discussions with financial advisors as something with which they are wrestling. Namely, advisors either want to maximize their time by growing their practice or focusing on value-creating activities for their existing clients. There is a constant struggle about how to outsource or eliminate low-yielding activities in favor of ones they specialize in or simply enjoy.
• It aligns with the stated goal of our firm: to be an uncommonly great partner to financial advisors. Blueprint Investment Partners is an asset manager and execution partner that specializes in portfolio management and trading services. We aim to provide advisors with a turnkey solution so they can focus on other activities – either ones they enjoy, ones they are great at, or ideally both.

The hardest part of scaling is deciding what to say no to in order to identify your frame, floor, and focus. Steve Jobs famously said:

 “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.”

There is no doubt that many financial advisors who we work with are just as good, if not better, than us in some of our areas of specialty. However, advisors who partner with us know those activities are not the ones that will help them reach their goals. They know it, embrace it, and collaborate with us to find the best balance between their secret sauce and ours.

We hope you will take the time to add this great book to your reading list. Whether you work with us or not, we hope it will help you like it has us.