Strive not to be a success, but rather to be of value. - Albert Einstein
Three key events have shaped how I approach running a financial firm:
1. Operating a high-tech business in the 1990s with 80 employees during incredible growth.
2. Spending over a decade in the financial industry seeing the good, the bad and the ugly.
Structure it like a Law Firm or Medical Practice instead of using salaried advisors so Clients are always with the person who knows them. You cannot systematize relationships.
Keep it small - A bigger team means bigger costs that get passed on to the Client. Since the assets are held by a third party custodian, there is no threat assets could disappear from a Client's control. It is a scare tactic big firms use against small, more agile firms. The advantages of directly managing the assets outweigh benefits of size in today's open information world.
Never lose sight of the clients that got you started - those first relationships are the most valuable. Don't forget it.
Outsource cautiously - evaluate whether outsourcing a function benefits you or the Client. If the former, will that cost get passed on to the Client?
Keep the costs down - directly manage the assets and don't try to be everything to everyone.
Choose new partners very carefully and vet them for years. The structure of the Firm can make a difference in the relationship by placing emphasis on cost sharing instead of revenue sharing. The latter can result in a self-destructive, greed-driven time bomb.