Should Your First Hire Be An Admin, A Paraplanner, Or An Advisor?

Executive Summary

The standard advice for a growing solo firm is to hire an advisor. Bring on a junior, hand them the small accounts and the overflow, give them years of client exposure, and eventually you’ve got a second person who can carry relationships and maybe buy in. It shows up in every staffing study and every conference session on scaling, and the logic reads clean, revenue-producing roles produce revenue. The associate-advisor career track exists for exactly this reason, and the studies that map it out treat the advisor hire as the obvious first rung on the ladder.

Most solo firms never make any first hire at all, and the ones who do often hire for growth when their real problem is time. Of the 1,407 non-ERA Texas RIA firms in the SEC’s adviser data we work from, 926 report one employee or fewer, roughly two thirds of the state running with nobody on staff. Those owners aren’t short on clients. They’re short on hours, and they spend those hours on operations and paperwork a junior advisor is both overqualified to touch and uninterested in doing. This post walks through what an administrator, a paraplanner, and a junior advisor each cost, what each one actually buys back, and why the advisor hire is usually the last of the three to make rather than the first.

Marcus ran a solo firm outside Austin, custodied at Schwab, about 120 households, most of them with him eight years or longer. No employees. He’d built the thing himself and it worked, the clients were happy and the revenue was steady and growing a little every year. What he couldn’t do anymore was keep up with it. He was opening accounts at night, chasing transfer paperwork on Saturdays, and turning down planning work because there was no room in the week to build the plans.

He knew he needed to hire. What he didn’t know was what to hire. Everything he read told him to bring on an advisor, and every time he sat with that he got stuck, because he didn’t need somebody to see more clients. He needed back the eight or nine hours a week he was losing to work nobody should be paying an advisor’s salary to do.

Nobody had helped him sort that out. They’d told him to hire an advisor, which felt like growth, and Marcus wanted the week to stop first.

Most Small Firms Have Not Made A First Hire At All

The whole conversation about first hires assumes a firm that’s already staffed enough to be choosing its next person. A lot of firms aren’t there. The number of SEC-registered investment advisers reached a record high in 2023 of 15,396, and the ones that focus on individual clients are small, an average of just 9 employees per firm nationally, with a long tail of firms well under that.

The state-registered end of the market, where most newer firms sit before they cross the SEC threshold, is smaller still. Our own read of the SEC’s IAPD Form ADV data puts it plainly for one state. Of the 1,407 non-ERA Texas RIA firms in the feed, 926 report one employee or fewer, and 1,046 report a single investment adviser representative. That’s a market where the typical firm is one person who does everything, and the first-hire decision isn’t academic for them, it’s the thing standing between the current week and a workable one.

It matters more now because the people who used to be the obvious junior hires are getting scarcer. Total advisor headcount grew just 0.2% to 283,137 by the end of 2023, basically flat for a decade, while the existing population ages toward the door. Cerulli counts 105,887 advisors planning to retire over the next ten years, about 37% of headcount and 41% of industry assets. Hiring a trained advisor into a two-person firm is harder and more expensive than it was five years ago, which is one more reason to be sure that’s the role you actually need.

The Real Question Is Which Hours You Are Buying Back

A first hire isn’t a growth decision first. It’s a time decision, and the time problem at a solo RIA is specific and measurable.

Cerulli’s work on how advisors spend the week found that advisors in the independent RIA channel spend less of their time on client-facing work than any other channel, 48%, and more of it on operations than any other channel, 10%, with another 9% on practice management. Across all channels advisors spend nearly 22% of their time on administrative tasks. The independent owner carries the heaviest operations load in the industry because there’s nobody else to hand it to. Cerulli’s own read of that data is that many of these advisors would be better served by hiring an operations manager, not another advisor.

So the useful exercise before you hire anybody is to figure out which hours you’re trying to get back. Account opening, transfer follow-up, billing, CRM upkeep, scheduling, form filing, none of that needs a license and none of it needs planning training. Building the plan, running the tax projection, prepping the review, that needs training but not necessarily a license. Sitting in the meeting and owning the relationship needs both. Three different buckets, three different hires, and most solo owners are drowning in the first bucket while the advice tells them to hire for the third.

What An Administrator, A Paraplanner, And A Junior Advisor Cost

The rough numbers, and they’re only rough, because the studies that break these roles out cleanly are a few years old and pay has moved up since.

An operations and administrative hire is the cheapest of the three. Schwab’s compensation work has put base salaries at $43,000 to $98,000 at the median for operations and administration roles across a wide range of firm sizes, with a client service associate at the lower end of that and an operations manager at the upper end. For a first hire at a small firm you’re usually looking at the lower half of that range, plus payroll taxes and benefits.

A paraplanner sits in the middle. The last industry staffing study to map the roles cleanly, built by The Ensemble Practice for the CFP Board, put an analyst or junior paraplanner at a median around $55,000 total and an associate advisor or senior paraplanner at a median around $68,000 total. That guide runs on 2017 compensation data, so read those as floors. The Ensemble Practice’s 2025 survey found service and support advisor base pay had jumped 32% and chief operating officer pay was up 38% since 2018, so the real current medians are meaningfully higher.

A junior advisor is the most expensive. The same CFP Board guide put a service advisor, described there as often the first professional hire a solo practitioner makes, at a median around $97,000 total, with a lead advisor well into six figures. Add the recruiting cost, the ramp time before that person is contributing, and the fact that three-quarters of firms hired in 2024 with the median firm adding two employees, which means you’re bidding for that person against every other firm in your market.

Whatever you hire, staff pay is the biggest line on the P&L once you’ve got a team. Schwab’s 2025 RIA Benchmarking Study found staff pay accounted for 68% of a typical firm’s total expenses in 2024. The first hire is the one that starts that clock, so it’s worth getting right.

Why The Junior Advisor Is Usually The Wrong First Hire

The advisor hire is the one everybody reaches for and the one that most often disappoints a solo owner, for a few reasons.

The first is that a junior advisor doesn’t fix the time problem. They need training, they need client introductions, they need review meetings you sit in on for a couple of years, and in the meantime they’re not taking account-opening paperwork off your plate, that’s beneath the role and they’ll resent it. You’ve added salary and management load and kept the administrative work.

The second is capacity. Wealth management practices serve an average of about 142 clients per producing advisor, and a solo owner with 90 or 110 households has room to add clients before a second seat is required to serve them. Hiring an advisor to see clients you don’t yet have is paying for capacity ahead of demand, and the demand may take years to show up.

The third is that the growth case for teams is real but it’s a longer game than the pitch suggests. Cerulli’s research shows the average AUM for team-based practices is more than three times higher than solo practices and annual organic growth is more than double. That gap is worth chasing. It also builds over a decade, and the firms living in it mostly didn’t get there by making the advisor their first hire, they got there by freeing up the founder first so the founder could go get the growth.

There’s a fair objection here, which is that a paraplanner or admin won’t build enterprise value the way a second advisor does. That’s true, and it doesn’t change the sequence. The value in a second advisor comes from clients treating that person as their advisor, and that transfer takes years of the founder having enough time to run it properly. A founder buried in operations can’t run it at all. Freeing that time is what makes the eventual advisor hire work.

When A Paraplanner Does More For You Than An Administrator

The administrator is the default first hire and it’s the right call more often than not. It doesn’t fit every firm, and the tell is what kind of work is actually backing up.

If your evenings are going to account opening, transfers, billing, scheduling, and CRM cleanup, hire the administrator. That work is pure drag, it doesn’t need judgment, and handing it off gives you the most hours back per dollar of any hire you can make.

If your evenings are going to plan construction, tax projections, retirement income modeling, and review prep, an administrator doesn’t touch that and you need a paraplanner. This is the case for firms that have built a real planning offer, where the bottleneck is analytical work rather than clerical work. A paraplanner also gives you a training path, a strong paraplanner becomes an associate advisor over a few years, which is a cheaper and lower-risk way to grow a second advisor than hiring one in cold.

Plenty of small firms actually need a hybrid, somebody who runs the operations and does first-draft planning work, and for a two-person firm that combined role is often the honest answer. Just write the job description for what you need rather than for the title, and pay up for the planning skill. That half is where the money goes to work.

A Four-Step Way To Size Your First Hire

We call this the first-hire sort, and it takes about two weeks of paying attention before you post anything.

1. Log the hours for two weeks. Not an estimate from memory, an actual log. Every block of work, what it was, how long it took. Owners are consistently wrong about where the week goes until they write it down.
2. Sort the list into three buckets. Work that needs a license, work that needs planning training but not a license, and work that needs neither. Total the hours in each bucket.
3. Hire against the biggest bucket. For most solo firms that’s the third bucket, the clerical and operations work, and the hire is an administrator or client service associate. If the middle bucket is bigger, hire the paraplanner. Let the log pick the role.
4. Wait on the advisor hire until you have client demand you can’t serve. Not before. When you’re turning away good prospects because there’s no room to onboard them, that’s the signal for a revenue-producing seat. Schwab’s benchmarking work puts the rough industry marker at one new full-time employee for every $403,000 in revenue, so a firm doing $400,000 or $500,000 in revenue with no staff is overdue for a hire, and the log tells you which one.

The whole point of the sort is to stop the title from making the decision. “Hire an advisor” is a plan for a firm that already has operations covered. Most solo firms don’t, and the log makes that obvious in a way that a conference session never will.

If you’ve already crossed into hiring late, past capacity, fielding calls you don’t have time to return, the same sort still works, you just run it faster and you may end up making two hires close together. The order holds up. Get the founder’s time back first, even partially, because every other move you want to make depends on the founder having room to make it. We laid out the adjacent decisions in when to hire an administrator, how many clients are too many, and how to bring on another advisor in a solo RIA.

For more on the systems behind a firm that runs without the owner in every seat, see our practice management library.

Our goal is to make sure advisors know what options are available and make it easier to find those options. Marcus had more room than he thought, he hired an administrator, got his Saturdays back, and started planning the advisor hire for two years out. Most owners get there eventually. A lot of them spend an extra year buried first.

Sources

Schwab Advisor Services, 2025 RIA Benchmarking Study, via Financial Advisor. Cerulli Associates, U.S. Advisor Metrics and Cerulli Edge, via AdvisorEngine, NAPA-Net and WealthManagement.com. CFP Board Center for Financial Planning, Financial Planning Career Paths, researched by The Ensemble Practice, PDF. The Ensemble Practice, 2025 Careers and Compensation Survey, via Financial Planning. Schwab RIA Compensation Report via The Wealth Advisor. Investment Adviser Industry Snapshot via COMPLY and InvestmentNews. Texas single-employee and single-IAR share from Ritz Stevens’ analysis of SEC IAPD Form ADV filings, 926 of 1,407 non-ERA Texas firms reporting one employee or fewer as of the current feed.