No individual, regardless of how smart or experienced, can effectively serve the multidimensional financial needs of the affluent himself. It takes a team.
So you say, “no problem.” You will just pull together two or more senior financial advisors, add a junior or two, mix in a few assistants and send out some flyers to announce your new wealth management team. Not!
A team in its truest sense focuses on collective performance, shaped by shared goals, a unified approach to decision-making and mutual accountability. Building an “effective team” is where the challenge lies, and far too many aren't clear about what this takes. There are basically four types of teams.
Level 1: “I'll just get me an assistant or two to relieve my workload.”
This approach is disappearing, but not fast enough.
A client wants to open an IRA on April 15. His financial advisor says he will be out of the office, but his sales assistant or junior partner will handle it. So the client walks in at 3 p.m. April 15 only to find a confused assistant. The client hands the blank forms (signature only) to the assistant, who then asks for more information. The client doesn't know how to answer the questions; the FA just said “come in and it will be taken care of.” But it wasn't.
Level 2: “We can cover for each other, help each other and market ourselves as a team.”
This team is usually formed for the wrong reasons — the convenience of covering for each other during vacations, sharing support staff expenses or hoping that team selling will assist in closing larger accounts. Team members do help each other occasionally — but not always.
A client of financial advisor A calls. Since A is out, the sales assistant transfers the call to B. Because the call was for advice on whether to purchase a particular stock that B isn't familiar with, the client is transferred back to A's voice mail. A blows up on receiving the message when he returns. “You've gotta get this guy to stop calling me,” he yells to his assistant. “Get B to buy whatever he thinks is best, or you get licensed so you can make the trade yourself.”
Level 2 team members don't understand how critical it is for them to function as a cohesive unit. They have no written business plan, no clear strategy targeting the affluent and no thoughts about reducing the large number of clients or positions built up in their individual practices.
Level 3: “The company wants us to form a team.”
Teams formed by company mandate are too often doomed from the start. You need to have your own reasons, and those reasons must be shared by every team member. Even then, you will have to work very hard to make it work.
It's 7:30 a.m. and my cell phone rings. The caller is a 30-year veteran with $2.5 million in production, asking for my thoughts about his teaming with a buddy, a 32-year veteran with $3 million in production. “The firm is pushing teams, everyone is forming teams. Heck, we'd be one of the biggest in the firm. What do you think?” he asks. I gently shot down the idea, inferring he'd be risking a nervous breakdown. Fortunately, he agreed.
But how many FAs cave into the pressure to team up? Lots.
Level 4: “Let's get serious about becoming a legitimate wealth management team.”
The focus is on collective performance, guided by a long-range plan and shaped by a metrics scorecard system. At team meetings, a common disciplined approach is taken to decision-making. Because mutual accountability is linked to developing a wealth management business, everyone is eager to participate. These teams are easy to talk about but difficult to make work. Here's an example of one that worked:
Frustrated by their firm dragging out the approval of their presentation piece and group name, a group of three veterans forged ahead. Armed with a team business plan, assigned areas of expertise and team process, they began to perform as a team. Within three months, still without a brochure or official team name, they had $15 million in new assets on the books and another $45 million in their team's pipeline.
Don't be fooled. A wealth management team is not truly effective until it reaches Level 4.
Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients.