Podcast Summary: Managing Your Practice — "Practice Management Year-End Wrap-Up"

Host: Kathryn Williams (Head of Practice Management, Dimensional Fund Advisors)
Guests: Stephen Demand, Mark Colossa, Livia Ramirez, Peter (Pete) Wozniak (Practice Management Regional Directors)
Release Date: December 19, 2025

Overview

This timely year-end episode assembles Dimensional Fund Advisors’ global practice management team to reflect on 2025’s key lessons for financial advisory firms. Structured around five fundamental pillars—Human Capital, Client Experience, Operations & Technology, Growth, and Strategic Planning—the panel distills the most actionable insights, standout industry trends, and best practices shaping high-performing firms. Advisors will find candid examples, concrete strategies, notable statistics, and memorable quotes from direct consulting experience, all designed to set firms up for a successful 2026.

Key Discussion Points & Notable Insights

1. Human Capital: The Core Asset

• Defining “High Performing Firms”

  • Revenue growth, client and employee retention, profit margin, and revenue per advisor determine firm performance (04:00).
  • Top quartile across these metrics defines “high performing”—all others are categorized as “other firms” (05:00).

• Talent Structure & Cost Efficiency

  • High performers spend 42% of revenue on human capital; others spend 47%—not due to underpaying, but greater efficiency and role clarity (05:36).
  • Use of a “triangle” team structure: fewer senior staff, more support/paraplanner roles (06:00).
    • “A visual way to think about this is firms that are more of a triangle shape… less senior staff and more support staff.” —Livia (05:49)
  • 41% increase in paraplanner roles at high performing firms (06:16).

• Career Pathing & Engagement

  • Emphasizing both linear (promotion/lateral) and non-linear (role diversifying) career paths boosts retention (06:50).
  • Invest in ongoing career development to reduce “key person” risk.

• Actionable Tips

  • Compensation: “Your compensation plan should be reflective of where you want the organization to go in the future.” —Mark (10:00)
  • Training & Role Play: “The more technology can help us and automate certain tasks... then training and development plays a huge role.” —Pete (10:23)
  • Employee Value Proposition: “Advisors who can… articulate what their value proposition is to their employees is something that really makes firms stand out.” —Livia (11:05)

2. Client Experience: Creating Lasting Impressions

• Holistic View

  • “A more holistic view of client experience is really what’s happening before the meeting, during the meeting, after the meeting.” —Pete (12:18)

• Standout Examples

  • Firms investing in high-touch details: specialty coffee machines, client name signage, customized scents and décor (13:00–15:00).
  • Empowering staff at all levels to “wow” clients—autonomy to make client-centric decisions (e.g., $50 discretionary spend) (16:01).
    • “Do employees have the autonomy to recognize those opportunities and capitalize on them?” —Mark (16:01)
  • Systematized feedback: About half of firms gather client feedback annually; fewer do so in-person, but closing the loop by sharing and acting on feedback distinguishes top firms (18:02–21:50).

• Actionable Tips

  • Empower and celebrate employee initiative.
  • Recognize every staffer’s impact on the client experience: “Every employee… impacts the client experience, whether or not they are client facing.” —Livia (16:57)
  • Use formal feedback tools, but always: “One thing is to collect feedback; it’s another to actually implement it and communicate back to clients…” —Livia (21:00)

3. Operations & Technology: Finding Efficient Solutions

• AI Adoption & Realism

  • AI is being used as an augmenting tool, not a replacement for people. EMEAs: ~75% adoption among surveyed firms, but at different speeds (24:28).
  • “Firms… are thinking about AI not in terms of replacing individuals… but to help become more efficient in what they do…” —Livia (23:30)
  • Top use-case: capturing/organizing meeting notes, with compliance cautions (25:52).
  • Regulatory frameworks aren’t blocking experimentation, but full-scale transformation is still on the horizon.

• Workflow & Capacity

  • Top two challenges: capacity constraints and workflow implementation (28:55).
  • Keep it simple: “Start with a checklist… the people closest to the process should be creating that initial checklist.” —Livia (29:00)
    • Referenced “Checklist Manifesto” for best practices.

• Fees Landscape

  • Contrary to headlines, actual fee compression not observed; effective average fee rose from 66 to 72 basis points in the last five years (30:31).
    • “Raising fees or adjusting fees upwards tends to be more of an advisor issue than a client issue.” —Mark (31:40)

4. Growth: Establishing and Executing a Plan

• Referral Strategies Dominate

  • Still the main growth driver: 50% of new clients via referrals, but only 36% of firms have a structured referrals process (32:11, 35:39).
  • “Clients don’t refer to help the advisor; they refer to help their family and friends.” —Pete (36:24)
  • Personalization matters—unique, thoughtful gifts expressed as gratitude (e.g., a magnum bottle of wine) create referral moments (37:00).

• Defined Growth Foundations

  • Establish “Core Why,” a detailed target client profile (including psychographics, not just demographics), and a strong value proposition (32:02–33:00).
    • “When somebody asks what you do, reply with a why response. That may change the way prospects and clients feel about you.” —Mark (35:03)
  • Employee engagement: every staffer is a brand ambassador; knowing their “why” fosters a growth mindset (40:09).

• Engaging Centers of Influence (COIs)

  • COI referrals yield higher average client assets; creative relationship building (e.g., Padel outings) can drive high-quality introductions (38:31–39:34).

5. Strategic Planning: Setting Purpose & Measuring Progress

• Metrics & Focus

  • “What gets measured, gets managed.” Focus on leading indicators (e.g., number of referral requests or feedback meetings), not just lagging results (42:15–43:10).
    • “I prefer to know… how many feedback meetings have you done…? Those are the activities that lead to the results we’re looking for.” —Mark (43:10)
  • Keep/Stop/Start Framework for prioritization: one thing to keep, stop, and start in 2026 (42:56).

• Popular Frameworks

  • “Traction” / EOS system is widely adopted for aligning short-term targets with long-term vision (44:00).
  • Use mission, vision, and values as foundational anchors: “If an employee… doesn’t have senior management available, they should be able to look at the values and be able to make an educated decision…” —Livia (45:13)

• Vision & Purpose

  • “If you don’t know where you’re going, you’re just going to end up somewhere.” —Stephen (46:48)
  • Regularly review and clearly communicate mission, vision, values. Practice and share your “why” internally for cohesion.

Notable Quotes & Memorable Moments (with Timestamps)

• On Structure and Efficiency:
  “A visual way to think about this is firms that are more of a triangle shape… less senior staff and more support staff.” —Livia (05:49)

• On Team Empowerment:
  “Do employees have the autonomy to recognize those opportunities and capitalize on them?” —Mark (16:01)

• On Referrals:
  “Clients don’t refer to help the advisor; they refer to help their family and friends.” —Pete (36:24)

• On Fees:
  “Raising fees or adjusting fees upwards tends to be more of an advisor issue than a client issue.” —Mark (31:40)

• On Technology Adoption:
  “Firms… are thinking about AI not in terms of replacing individuals… but to help become more efficient…” —Livia (23:30)

• On Strategic Planning:
  “What gets measured, gets managed.” —Mark (42:15)

• On Vision:
  “If you don’t know where you’re going, you’re just going to end up somewhere.” —Stephen (46:48)

Highlights by Timestamp

• [04:00–06:30]: Human capital definitions & metrics, cost efficiency strategies.
• [10:00–11:33]: Best practices for compensation, training/role play, and employee value propositions.
• [12:00–17:50]: Client experience—holistic approach, “wow” factors, staff empowerment.
• [18:00–21:50]: Feedback collection & follow-up practices.
• [23:30–29:56]: AI & technology—adoption, regulatory context, workflow fundamentals.
• [30:31–31:48]: Fee trends; addressing fee/margin compression.
• [32:11–40:51]: Growth—referral process, defining target clients, COI strategies, employee engagement.
• [42:15–47:06]: Strategic planning—metrics, frameworks, mission/vision/values, practical approaches.
• [47:09–51:49]: Rapid-fire team recommendations for 2026 takeaways.

Final Takeaways & Team Recommendations (50:07–51:49)

• Pete: Empower employees with autonomy to deliver exceptional client experience—“Empower your employees to deliver an amazing client experience because they’re your most important asset.”
• Mark: Use data and benchmarking to inform decisions—participate in industry studies to understand your firm’s standing.
• Livia: Strategically invest in human capital: future org chart planning, robust job descriptions, clear employee value proposition, and articulate these via your website.

Conclusion

The panel wraps by emphasizing continuous learning, data-driven improvement, and collaboration with Dimensional’s resources (e.g., Global Advisor Study, practice management regional directors). Firms are encouraged to pick one actionable strategy to start 2026 strong, with an open invitation to leverage DFA resources for further growth and operational success.

For more resources, visit dimension.com.