SUMMARY
Aaron Grady opens this edition of The Rare Advisor by framing a question every financial advisor must answer: “Where am I now, and where do I want to go?” Joined by Steve Phillips, Chief Practice Management Officer at USA Financial, the pair unpack a practical roadmap for the evolution of a modern advisory practice. They call it the three-phase model—growth, expansion, and legacy—and use it to help advisors pinpoint their current position, clarify their destination, and choose the most effective practice-management tactics to get there. This summary distills their 40-minute dialogue into the key insights and action items advisors can implement immediately to scale revenue, deepen client relationships, and boost enterprise value.
The conversation begins with the growth phase, the launching pad for every independent financial advisor. Growth centers on consistent client acquisition, asset gathering, and brand visibility. Steve notes that, while growth “never goes out of style,” the method of growth must evolve as the firm matures. Early on, advisors rely on broad marketing tactics—seminars, prospect dinners, digital lead funnels—to attract any investor who meets basic asset minimums. Yet as the practice gains traction, the focus should shift toward attracting ideal clients who align with the firm’s investment philosophy, fee structure, and service model. Aaron underscores that this evolution is critical: a niche-oriented growth strategy not only increases revenue per household but also lays the foundation for scalable service processes that will matter even more in the next phase.
Transitioning to expansion, Steve points out that roughly 90 percent of advisory teams who enter USA Financial’s coaching program live in this middle zone. Expansion is all about scale: codifying repeatable systems, hiring and retaining top talent, and leveraging technology to deliver a consistent client experience. Advisors must upgrade from a chair-side “practice” to a professionally managed “business.” That means implementing documented workflows in the CRM, standardizing client review agendas, and institutionalizing a service matrix that aligns deliverables with client segmentation. Aaron highlights a hidden growth lever here: competitor-proofing your staff. By establishing clear career tracks, ongoing training, and performance incentives, an advisory firm can reduce turnover, protect intellectual capital, and free the lead advisor to stay in a revenue-generating role instead of firefighting daily operations.
A recurring theme in the expansion dialogue is the interplay between practice management and client experience. Steve reminds advisors that a first-rate client journey begins behind the scenes, with efficient processes and dependable team members. Tools like meeting preparation checklists, pre-scheduled outreach cadences, and cloud-based document vaults ensure every touchpoint feels personal—even as headcount and client load grow. Aaron adds that scaling firm culture is equally crucial: as new planners, paraplanners, and client-service associates come aboard, leaders must articulate core values and a unifying mission so the client experience remains stable. A consistent culture accelerates referral momentum because clients recognize the same high-service DNA in every interaction, regardless of who answers the phone or leads the review meeting.
The discussion then turns to the legacy phase, a stage too many advisors reach unprepared. Legacy is more than succession planning; it is the culmination of the advisor’s life’s work, encompassing personal wealth goals, client continuity, and firm heritage. Steve warns that if retirement is within five years and a succession blueprint is not already in motion, the advisor is “behind the eight-ball.” The ideal timeline for crafting a profitable exit—whether via internal successor, partial equity sale, or third-party acquisition—starts seven to ten years out. That window allows time to groom next-generation talent, introduce future lead advisors to key households, and refine valuation drivers such as profitability, client demographics, and net new assets.
Aaron expands on the concept of “selling the practice versus selling the book.” A book sale—essentially a one-time asset transfer—usually commands a lower multiple and higher post-sale attrition risk. A practice sale, by contrast, carries greater value because buyers pay for documented processes, a reliable operations team, and sticky client relationships. To command top dollar, advisors should leverage the expansion years to institutionalize everything: investment policy statements, client segmentation, marketing calendars, and compliance protocols. Doing so converts personal know-how into transferable intellectual property, reducing key-person risk and boosting the price-earnings multiple at sale.
A crucial, often overlooked legacy factor is client psychology. Steve notes that many veteran advisors assume clients will happily follow the designated successor, but loyalty evaporates if that successor doesn’t have a pre-existing relationship—especially for retirees who may be older than the incoming planner. Aaron suggests a phased hand-off strategy: first, joint meetings where the senior advisor praises the next-gen’s expertise; second, delegation of specific projects (e.g., Roth conversion analyses) to showcase that expertise; and third, independent reviews led by the successor while the founder remains available for reassurance. This slow-burn approach builds confidence on all sides and protects revenue.
Throughout the episode, the hosts stress that all three phases are interconnected. Growth objectives feed expansion ambitions; expansion infrastructure enables a profitable legacy outcome. Skipping the expansion phase—trying to leap from growth straight to exit—creates a fragile enterprise that underprices the advisor’s lifetime of effort. Conversely, over-investing in systems without a steady inflow of ideal clients leaves capacity underutilized and margins thin. The balanced approach is to view growth, expansion, and legacy as overlapping gears in a well-oiled machine, each driving the next.
Another takeaway is the importance of practice evolution for NextGen advisors. Younger CFP® professionals often inherit opportunities when older advisors enter legacy mode, either through mentorship tracks or outright acquisitions. By mastering expansion disciplines early—client segmentation, workflow automation, digital marketing analytics—these rising advisors can scale the inherited book efficiently and position themselves for their own future legacy events. Steve calls this the “double-win”: senior partners secure retirement income while juniors fast-track business ownership without starting from scratch.
To anchor the conversation, Aaron and Steve supply actionable self-diagnostics. They encourage viewers to rate their firm from 0 to 10 in three dimensions—client acquisition (growth), practice management (expansion), and succession readiness (legacy). Scores below seven signal opportunity gaps: perhaps marketing ROI is too low, workflows are undocumented, or no formal continuity plan exists. The rating exercise not only clarifies strategic priorities but also fosters accountability across the leadership team.
Finally, the hosts invite advisors seeking deeper guidance to contact USA Financial’s practice-management consultants. Their coaching solutions—including business valuation, M&A matchmaking, and process-automation toolkits—support every stage of the three-phase journey. As Aaron closes, he echoes a mantra that encapsulates the episode: “When the why is clear, the how becomes easy.” Define your “why” for each phase—why you want ideal clients, why you need scalable systems, why legacy matters—and the tactical steps will follow.
In sum, this video equips financial advisors with a crystal-clear framework to measure current reality, chart future milestones, and apply phase-appropriate best practices. From niche client acquisition and process automation to team retention and succession engineering, the three-phase model empowers advisors to turn an individual practice into a durable, saleable enterprise—one that delivers remarkable client experiences today and a meaningful legacy tomorrow.
TRANSCRIPT
Aaron Grady, Advisor Consulting Director at USA Financial - Welcome back to another edition of the Rare Advisor. I'm your host, Aaron Grady. And with me again today is my friend and mentor, Steve Phillips, Chief Practice Management Officer at USA Financial. Thanks again, Steve, for joining me.
Steve Phillips, Chief Practice Management Officer at USA Financial - Mr. Grady, I'm glad we're making this a regular occurrence. I really enjoy being on with you.
Aaron Grady - I mean, pretty soon I'm just going to have to have you as my co-host.
Steve Phillips - I like it. I like it. I'm going to write that down. We got it. Co-host. Nice.
Aaron Grady - I have asked you here today, you and I were having this conversation. The idea of helping advisors get a better sense of where are they going in their practice. And we were actually, you and I were in a room of advisors the other day we were having this conversation. And I love how you approach this with advisors. And I know you you create the analogy of starting with the end in mind and charting a journey and a trip. And with any trip or any journey that you're going to take, you have to start with two points. Where are you going? So start with the end in mind and where are you today? And what you've revealed to me and to these advisors quite often is most advisors sometimes struggle to put their finger on, well, where am I at today? Where am I at in my practice? And you've come up with a very interesting take on how to help advisors actualize or visualize the state of their practice today. And you've done it through the lens of what you've deemed the three phases. So the three phases of an advisor's practice. And so I've asked you here today to share a little bit about that. And let's have a conversation because I think our viewers would really find value in this to better help them understand. knowing where you're going is important, but knowing where you're at is probably just as important.
Steve Phillips - Yeah, and thanks for that. You know, first of all, you give me a lot of credit. You remember that I think it was a collaborative between you and me and another one of our colleagues when we were trying to put all this together. The whole idea of beginning with the end in mind certainly is important, something we all believe in when working with advisors and a big part of our practice management approach and protocol. And I agree with the starting point and the ending point. I think what the three of us found out as we were looking at this, and I think this probably goes back seven, eight years maybe, kind of as we're coming out of our former lives elsewhere and trying to figure out where our advisors, there is a beginning point and there is an ending point, but I think what we realized is that there are some things that are happening in between. And so we really have to help, and advisors don't always know what those things, they don't know how to describe it, and so it helps that we kind of built this framework together. You know, the other thing that I like about this approach is... One of the things I really believe in is that as we're starting to help advisors or talk to advisors that might be considering working with us or whether they should stay or move or whatever, is before we can talk about these best practices ideas that every organization wants to talk about, and we sure have some really special things that we can do for advisors, I think there's a number of appropriate questions to ask to find out where an advisor is. And this is kind of back to your first point. Those three phases. And we call them, generally, growth, expansion, and legacy. In those three phases, if you ask an advisor where he or she finds themselves, and I know we're going to jump into it a little bit, then I think that they have to sort of go, wow, that's a pointed question. Where do I see this practice? I do have the end in mind, but in order to get there, help me understand what I'm going through now. So that's kind of how we came up with that. And I think that between me and you and Matt back in the day, we were talking about, I don't know how many hundreds of advisors, agents, and thousands maybe that we had worked with. And this idea of where could a practice possibly live at any given time on its own journey to evolution. I think that's the word that we use, the evolution of a practice. And those were the three phases that we came up with. And before I kick it back to you, know, one of the things that we find when we're doing our events and we're talking to advisors is, I don't know that we have all the answers. So the question we've asked advisors is, hey, do you think that there's a fourth phase? Is there something that you are experiencing now with your team or something that you're anticipating that should be slotted in here? And interestingly, we've never had anybody say anything else. So it seems that the growth, expansion, legacy track is one that most advisors and teams can relate to.
Aaron Grady - I think, and as we dig a little deeper into the specifics around what is growth, what is expansion, what is legacy, I think that'll help our viewers get a better handle on it. But you're right, I think they encapsulate enough of what goes on in an advisor's practice. You're right, there's not a need for a fourth because the three. What I'll also say to Steve too, and you mentioned this and I alluded to it earlier is,
Steve Phillips - Yeah. Yeah.
Aaron Grady - You know, when we start coaching with an advisory team, you know, the idea of, you know, where does any organization or coach, well, where are we gonna take you? Where do you wanna go? You wanna, I wanna grow my practice. That's all well and good. But understanding the dynamics of what's going on in your practice today. and the things that are opportunities inside of your business based off of these three phases of where you live today are just as important because it factors in, again, in the journey. And so I love this conversation. I love that this is part of where we start. let's jump into, let's get into some specifics about these three phases of a business.
Steve Phillips - Yeah, and that's important. You know, one other quick comment is that if you were to ask advisors, this is the thing that I thought was so important about as we came up with these three phases. If we didn't mention three phases or sort of give a suggestion of a track, I think you just mentioned it. If you ask an advisor, where do think you are? It's always like, we're growing, we're expanding, or we're trying to move down the road, or all the different ways that they could say the same thing without realizing that, to your point too, some of these things overlap. So if you started with growth, that would be an obvious thing. Perhaps the start of a practice. I'm acquiring new clients, I'm acquiring assets. I'm trying to figure out how do I get the best return on marketing and client acquisition programs, that type of thing. Now, while we sort of call that the first phase, it's likely the phase that really never ends. It never goes out of style. think that with all the coaching that you have done and all the consulting that you have done, I don't think any practice goes, hey, Aaron, we're good, man. No more new clients for us. No more new assets for us. but it is, it does give teams an idea that this is the starting point. Obviously you're not going to build a practice without new clients and new assets. And so while that's the first of the three phases, it really does overlap. And so I don't know before I get into it, if you have a comment about growth and what you see as you're working with teams.
Aaron Grady - I would agree with you. I think you're right. think for most advisors, think, as you said, growth never goes out of style. Acquiring new assets, acquiring new households or new clients is something that is foundational to any organization. But eventually, you're right, it does start taking somewhat of a backseat. But how people acquire is part of that equation as well, because as the practice evolves, how they go about acquiring
Steve Phillips - Yeah.
Aaron Grady - New assets, new clients changes. so understanding as an element of growth how that applies as well, which kind of factors into some of these other phases, I think is very, important.
Steve Phillips - That's a really, really good point that I don't think that I've ever really thought of, because I've always used the idea that growth never goes out of style, but you're so right. As we get to the next phase that we call expansion, and the word, if we were going to attach a single word to any of these phases, we hear the word scale, right, in expansion. Now we would define expansion as, well, first of all, we know that probably 90 % of the teams, advisors that we come across, are in this category. That's where they find themselves. And they can describe it different ways. You know, we've done some things really, really well, and we need to find ways to do more of that. Maybe it's creating time. Or we've thought of things as a team that we've not done to this point. And to your point is that we need to have new methods to acquire new clients and all that kind of stuff. So we see a lot of focus on developing duplicatable processes, creating efficiencies. Every team describes scale a little bit differently. Some of them really focus on client acquisition, even in the expansion phase. Others will tell us, it's all about team. I need the next advisor. We're growing like that. I have to focus on maybe a next gen coming up behind me. Maybe it is a key admin person so that the rainmakers can continue to do their thing. So the scale. And the expansion really takes on a number of different facets dependent on where the team is. The other thing that's attached to that are things like I've hired the teammates. I've hired those new key members. What do I do to keep them around? And so you and I talk a lot about career tracks. How do we train our teams? How do we, you know, we talk a lot about, Aaron, about competitor proofing. Clients, what about competitor proofing staff? Because we know that that's a thing. So anyway, those are just a few of the really key things while always trying to increase enterprise value. All of these things have an effect on the enterprise value of a firm. And different firms describe it different ways. But those are some of the key things that we would see in that phase.
Aaron Grady - Yeah, I think you hit the nail on the head. Probably 90 to 95 % of the teams when we engage with them for coaching and consulting, this is where they are living. And as you said, growth layers in, right? It doesn't go out of style. It's part of this. But expansion, the idea of scaling the business and maybe adding that next storefront. Maybe I got to add another office systems and processes, running a business like a business, creating a meeting structure for my team to better engage with them and keep them involved. you know, the team retention is such a big topic. know that, you know, one of the one of the analogies we, you know, we keep telling advisors that don't be the farm system for somebody else. So so expansion, think, is critical and it is foundational to the success.
Steve Phillips - Yes.
Aaron Grady - And succession of a practice which
Steve Phillips - Yeah. There's a key. I love these conversations with you because even though you and I, we both know what we want to talk about and these are things that we have been sharing with teams for years, there's always some little piece that you drop in there that I don't think of. I, without saying it, I think what you sort of brought to my mind was so many advisors, I think this is where they get tripped up. They go from growth to legacy. So, I mean, how many advisors have we run across like, I'm out of time, I don't know what to do or, I mean, I think that they don't take the breath, like they're still a lot of years in front of us. And your other point was correct here too, is that there's an opportunity to change the client and asset acquisition mode, if you will. Maybe it's ideal clients at this point, which does what? That follows client classification and the service matrix and all those things. I think that advisors go, oh, we've grown it. Is it a pretty good thing? Maybe we ought to look now. Are we going to sell it? So the idea and some of the things that you mentioned that happen in expansion is so important because there is no going from growth to legacy. Somewhere in there, however you describe it, however big the team is, however small the team is, something has to happen in expansion to get you there.
Aaron Grady - I love it. And you're absolutely right. We've seen some teams try to go from growth to legacy and they have, know, oftentimes they stumble into it and it sneaks up on them. Shocking surprise. Hey, I'm ready to retire. And most advisors don't get max value for their practice. don't, they don't, they don't realize the saying that we always saying it's the value of your life's work. Right.
Steve Phillips - You know, that is such a key phrase, man, your life's work. And for so many advisors, that is what it is. Here's the other thing that I might mention about expansion before we finish it up and talk about legacy is that I think we could say that expansion is actually really what gets a team ready for a good legacy, a good summation of your life's work. Now it might.
Aaron Grady - And there's a missed opportunity.
Steve Phillips - Be several years and should be probably several years down the road. But it's that conversation around what do we need to do in this second of three phases to get us ready for whatever it might be. so that's why jumping from growth to legacy, we know doesn't work because expansion gets you down the road to legacy. Yeah.
Aaron Grady - So talk about legacy. So we've danced around it a little bit.
Steve Phillips - It's kind of an interesting thing and it's really become, you know, there's a few people in our office here that love to, I get to be the oldest guy in the office by the way, right now. So I, you know, I'm like the, I'm like the example of what's going on after you spent 35 years in the industry. But what's happening is a lot of advisors that have 30, 35 years in the, in the industry are suddenly on the doorstep of legacy and are thinking, There's a lot of things here. We've seen health issues drive advisors to think I need to make a decision really quick or I want to hand it down to my family. We have some of those things going on or am I have I built something nice that would be acquired and so all of those things and they seem to be happening in this demographic after you've built something a few advisors I think and build something really cool and really valuable in 10 years not the model that we see it's typically 25 30 35 years, whatever. And the big thing I would say about legacy, and I think that you would agree with this, the big mistake that so many teams make is they get too close before they start thinking about it. And I think that you and I, over years of discussion and working with teams, is if you're five years within five years, which seems like a long time, but it's not. If you're within five years of saying, I'm good, I'm selling it, I'm handing it over to my son or my daughter or whatever, or a team member that wants to buy it, if you've not thought about that,
Aaron Grady - Yep.
Steve Phillips - You're too close. Because here's the thing that we think about is how do you want this thing to be? Are you selling the book? Are you selling the practice? There's a lot of things that we do now to help advisors try to determine which is the best way to realize this legacy. Oftentimes it includes a person, doesn't it? And I think that advisors go, I've got my person in place right now and we're good. Without realizing, that legacy has to include the clients. What do the clients think? I've been working with you, Aaron, for 37 years. I know this young person that you've brought up, but I don't work with them directly. And they're younger than I am. Why would I? So there's all of these things that have to happen over time that really, and you and I have said, every single process that goes on in any of the three phases has to be about. the clients and legacy is no exception. Because oftentimes, you know, if you're selling a book or whatever, how many of your key clients stay retaining the assets, retaining the key clients is a big part of the success of the transition or the merger, the acquisition or whatever it is. So all of that planning, how do I continue to increase enterprise value? How do I really polish up the processes that we've put in place during the expansion phase and so on? And I know you have other comments there.
Aaron Grady - Absolutely.
Steve Phillips - I'd love to hear those before we wrap up, but I think you would agree. If you're within five years and haven't thought about it, boy, you're a little bit behind the eight ball.
Aaron Grady - Yeah, I agree. think sometimes advisors, I use the term, it sneaks up on them. I think we could say short-sighted. It's really easy as part of what we do. We talk to advisors all the time that they spend so much time working in the business that they forget to work on the business and planning for a succession of some form.
Steve Phillips - Yeah.
Aaron Grady - or their legacy, I think, is something that oftentimes it's, you know, it's the whole adage, know, Cobbler's kids have no shoes. They spend all their time helping their clients prepare for what comes next that oftentimes they forget to prepare themselves. What I do love about the the legacy element, because we used to call it succession and we changed to the legacy because succession kind of I think it kind of narrowed it too much. And legacy speaks to something a little broader because it's not all
Steve Phillips - Yeah. Right.
Aaron Grady - always selling the business and moving on or turning over the keys to a younger generation. Sometimes it's selling part of the business. Sometimes it's becoming an investor in your own practice. We see some advisors now who are kind of they're they're putting in place through expansion the team, the tools, the systems and processes to where they can still own it, but they don't they're not.
Steve Phillips - Yeah.
Aaron Grady - Responsible for day-to-day operational responsibility. you know, legacy is really about what becomes of your life's work. What have you built? And there's a unique opportunity there.
Steve Phillips - Yeah. One more great point that you just made. Think of a couple of advisor teams that we have right now. One of them is a family business. And so the whole idea of this, how does this legacy kind of play out and having your person and grooming the person into that. And I wouldn't say that this particular advisor has been forced to extend. I think that he's found a way to have some new energy as he is bringing up this next generation that he has in his practice. And so it's kind of extended, you know, this horizon for him. And that's really a good thing. think that a lot of these, here's the other thing too. And as the, as the requisite old guy at USA, this is what I believe. And here's your little bingo card because human nature component is what I'm going to say here. You know, it's like anything else in your life. I think what's happened to a lot of these advisors is time starts to speed up. I'm 15 years out, I'm 10 years out. It's like when you're raising your kids, all of a sudden, bam, overnight, they're grown up and they're out of the house. I think a lot of advisors sort of got surprised by how fast the time goes. They're enjoying the business, they're growing the business, things are going well, all of a sudden, it could be an age thing, it could be a health thing, it could be just that I'm done, I'm ready, and I'm too close. And so I think that you and I might agree that it might be the most key thing that we're focusing on these days as this whole generation of advisors is trying to determine, is it time? Am I ready? Have I missed something? That's great conversations to have.
Aaron Grady - It creates a unique opportunity. just as we kind of wrap up here today, and I appreciate you being with me today, Steve, these are such great conversations and the topics are important. We had a conversation with a group of NextGen advisors a week or so ago. And for them, the idea of succession or legacy is what role do they play in this?
Steve Phillips - Yeah.
Aaron Grady - But they're also living in the expansion element of it because as these young advisors come up in the industry and as the older generation ages out, there's an opportunity to expand your practice through acquisition. through acquiring someone who's in a legacy and how these all interlock in these interlocking conversations. It just creates a unique opportunity that we're living in today because of where the industry is. But I think these are conversations that need to be had. And I think that these are conversations, as you said, the reason why we have these so early in our coaching with advisors is because most conversations anybody ever talks about when, when an advisor is considering a new relationship or maybe acquiring a coach or consultant or a new affiliation, it's usually always focused on what can you do for me to help me get where I'm going. But often they lose sight of, well, we need to understand where you are first. And, you know, charting any course always starts with two points. Where are you going?
Steve Phillips - Right, right.
Aaron Grady - And where are you today? So thank you again so much, Steve. This is a great conversation. You know, I hope our advisors and our listeners get as much out it as we do. If you like what you heard today, definitely remember to like and subscribe. And as it's always been said, when the why is clear, the how becomes easy. So never lose sight of your why.
Steve Phillips - Yeah.
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The RARE Advisor is a business model supercharged by Recurring And Repeatable Events. With decades of experience coaching successful advisors, your host, along with other leaders in the industry, discusses what it takes to grow a successful practice. With the aim of helping financial professionals and financial advisors take their business to the next level, this podcast shares insights and success stories that will make a real impact. Regardless of the stage of your practice, The RARE Advisor will provide thoughtful guidance, suggestions for developing systems and processes that work, and ideas for creating an authentic experience for your clients.
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