Opening a Second Office in a New Market

Karen Novak


Karen Novak, of Pershing Advisor Solutions, outlines a few key reasons why advisory firms consider opening an office in a new market—along with some of the qualities and characteristics of firms that successfully navigate these waters . The benefits of this type of expansion—in addition to other decisions that can promote a firm’s scalability and profitability—are outlined in greater detail in Crossroads: Critical Decisions That Advance the Evolution of an Advisory Firm.

Video Transcript

Firms typically start thinking about opening a second office once they’ve reached a saturation point in their existing market, or if they have aspirations to be a major regional—or even national—player.

The primary consideration in choosing where to expand is access to clients. Of course, you want to be near the clients you want to attract. And proximity also makes it easier to open up referral networks and build trust as part of the community.

A secondary driver—but crucial nonetheless—can be better access to employee talent in the region. This holds particularly true for firms based in rural and suburban areas who are considering opening an office in a nearby or distant city. Of course, being located in an urban area offers easier access to a broader range of talent, particularly young professionals.

At the outset, firms should get very clear on why they’re attracted to a specific regional market and what they expect to gain by making this kind of investment.

We’ve found that firms opening a second office to gain better access to clients and talent are able to achieve repeatable increases in both their client base and the overall value of the firm.

By way of contrast, when firms focus primarily on cost savings, they aren’t able to drive the same kind of long-term growth and value.

Firms that successfully open a second office have a few things in common.

  • They have a clear value proposition for prospective clients and for the people who will staff the office.
  • They enlist local professionals—like advisors or centers of influence—to validate their business plan for expanding into this new market.
  • They focus a lot on culture – because replicating the firm’s culture can be a major challenge.
  • They put strong leadership in place, which can often mean transplanting a seasoned leader to help launch the new office.
  • They take care to engage people in the new office, so they feel connected and vital: not second-tier.
  • Finally, they clearly communicate goals and expectations to their staff—and they listen, so people know their ideas are understood and valued!

When you open a new office with a clear mission and an energized staff, it’s on the fast track to being a successful contributor to the firm as well as being a valuable asset to a new universe of clients.

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Karen Novak

About Karen Novak

Karen Novak is Chief Operating Officer for Pershing Advisor Solutions, a BNY Mellon company, and is a Managing Director for Pershing and BNY Mellon, N.A. Karen oversees the registered investment advisors’ client experience, from client service and onboarding to operations for brokerage and bank custody, risk, control and technology. Pershing Advisor Solutions is a leading custodian for registered investment advisors, wealth managers and family offices in the U.S. In addition, Karen leads Pershing’s Global Advisory initiative, which helps advisors of every business model manage the total wealth of their clients by seamlessly leveraging affiliated businesses of BNY Mellon around the globe.

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