5 Essentials to Choosing Business Partners Wisely

Much like in a law firm, where choosing the right partners often plays a pivotal role in shaping not only the trajectory of the practice but also its prospects for long-term success, the same principle holds true for financial advisors. Selecting your partners judiciously and wisely can make all the difference when it comes to ensuring the continual organic growth and sustainability of your enterprise.

The individuals you choose to align with will influence your firm's direction, culture, and success. In a law firm, partners collaborate closely on cases and strategic decisions. In a similar vein, financial advisors rely on their partners to contribute expertise, resources, and a shared commitment to the firm's growth. This decision requires foresight and a shared vision for the future.

Dilution of your owner’s equity can be a powerful tool—but only if you choose wisely. Often, individuals you view as potential partners are far better leaders than owners. Professionals who are essential to the organization’s success, help set the strategic direction and even drive much of the firm’s organic growth, but for some reason don’t possess an ‘owner’s mindset or lack the necessary capital/desire to be an owner. Taking time for careful consideration is essential. Yet too many advisors wait far too long to choose and end up running out of runway. Over the years, I’ve realized it ordinarily takes a minimum of 7-10 years to get it right. Yes, you can microwave the process. But it’s rarely the healthiest approach. Begin early, and then regularly evaluate and re-evaluate those candidates for partnership.

In another blog article, I’ll address what you may wish to do with existing partners to continue growing relationships, building trust, and holding each other accountable for the firm's future growth. But let’s first look at the five essentials to choosing business partners wisely.

1. Shared Vision of Growth and Core Values: I hear you…please not another “mission, vision, values” alignment conversation! However, you’ll run into a buzzsaw if you and your future partners don’t align on how you want to grow the firm. Without exception, if you’re not fully aligned on the core values your firm stands for, I guarantee you’ll end up building the wrong team for the future.
   
   One of the foundational aspects of forming a successful partnership is aligning on a shared vision and values. Partners at a law firm often share a commitment to upholding justice and serving their clients with integrity. Similarly, in the financial advisory world, partners should be aligned in their approach to client service, ethical standards, and the overarching goals of the firm.
   
   Additionally, when considering potential partners, discuss your visions for the firm's growth and ensure they’re aligned. You can certainly disagree, but you must be aligned. Look for individuals whose values resonate with your own and who are committed to the business's long-term success.
2. Complementary Skills and Expertise: Just as a law firm benefits from partners with diverse legal expertise, a financial advisory firm thrives when its partners bring complementary skills and knowledge. Consider the areas where your firm could benefit from additional expertise—whether in investment management, financial planning, client relationship management, or business development.
   
   Seek out partners who excel in areas where you may have gaps or weaknesses. A well-rounded team with diverse skill sets is far better equipped to address the varied needs of clients and adapt to changing market conditions.
   
   
3. Commitment to Growth and Development: In a law firm partnership, ongoing professional development is essential for staying ahead of legal trends, refining skills, and maintaining a competitive edge. Similarly, continuous learning and growth are paramount for advisors.
   
   When evaluating potential partners, consider their commitment to personal and professional development. Look for individuals who demonstrate a hunger for knowledge, a willingness to embrace new technologies and methodologies, and a track record of investing in their own personal growth.
4. Compatibility and Communication: Effective communication and compatibility are essential to a successful partnership. Partners at a law firm must be able to collaborate seamlessly, share insights, and make decisions collectively. Similarly, in an advisory firm, partners must be able to communicate openly, resolve conflicts constructively, and work together harmoniously towards common goals.
   
   Assess your compatibility with potential partners through candid conversations, joint projects, and shared experiences. Look for individuals who share your communication style, work ethic, and problem-solving approach.
5. Long-Term Commitment: Forming a partnership is a significant commitment that requires mutual trust, respect, and dedication. Legal partners often have long-term relationships built on years of collaboration and shared experiences. Likewise, cultivating enduring partnerships is key to sustaining growth and weathering challenges for advisors.
   
   Consider any prospective partner’s level of commitment to the long-term success of the business. Look for individuals willing to invest their time, energy, and resources into building a lasting legacy and an enduring firm.

Conflict or collaboration? Strife or sustainability? The choice is very much in your hands. Finding business partners committed to building a growing and enduring firm requires careful deliberation, foresight, and a shared vision for the future. It’s about looking past the surface and assessing whether or not the individual brings shared values, complementary skills, a commitment to growth, effective communication, and long-term dedication to the enterprise.

By selecting partners who embody these qualities, you’ll position your firm for sustainable growth, innovation, and success in an ever-evolving industry. Remember, the right partners can be your greatest assets—propelling your firm to new heights and shaping its legacy for generations. Choose wisely, and together, you can achieve greatness.

Coaching Questions From This Article

1. What can each of your partners do to develop your firm's next-generation leaders and owners more effectively?
2. How are you currently measuring the effectiveness of each partner in your firm?
3. How aligned are your partners in growing your firm’s revenue, roster of new clients, and the skill sets of your team members?
4. In what ways will your partners improve communications this year?