Wealth Management Team or Sole Practitioner?

whether you are leading a wealth-management team or are a sole practitioner should not be the determining factor in deciding if you should target the affluent.

New York: During a conversation with a senior executive at a major firm, I was asked a question that I suspect is on the minds of many today. We had been talking about our most recent research on wealth-management teams, and he was particularly interested in what enables teams to move through the stages of development and achieve a high level of performance. Then came the question: "Is all this applicable to a sole practitioner as well? What is your opinion on a sole practitioner with one or two assistants being able to deliver wealth-management services?"

It was a great question that led to an interesting dialogue. As we reviewed what enables a team to achieve high performance in attracting, serving, and retaining the affluent, he eventually became convinced that the answer is yes -- but that the means for getting there are different. This is important, because I sense that some sole practitioners who are not inclined to hire and build a team are wondering if that means they should simply give up on targeting affluent clients.

It is my opinion that whether you are leading a wealth-management team or are a sole practitioner should not be the determining factor in deciding if you should target the affluent. Rather, that decision should be based on the how the team or sole practitioner addresses the following questions ...

  1. Can you identify an affluent market niche where you have the background, adequate contacts, and a strong inclination to effectively target?
  2. Are you prepared to use introductions, referrals, networking, intimate client events, and other high-impact methods to connect one-on-one with the affluent prospect needed to successfully build your business?
  3. Are you committed to delivering a consistent wealth-management experience to each and every affluent prospect and client?

It's in delivering the consistent wealth-management experience that the real difference between a wealth-management team and a sole practitioner emerges.

Both must be able to effectively meet the multidimensional financial needs of each affluent client. All of our research between 2004 and 2006 stresses that the affluent want a go-to financial quarterback who can coordinate the full range of their financial affairs. Even though the specifics will be unique to each client, a team or sole practitioner must be able to provide the following ...

  • Budgeting and cash-flow management
  • Standard and private-banking services
  • Insurance planning
  • Asset/Investment management
  • Education planning
  • Tax planning
  • Retirement planning
  • Estate planning
  • Charitable giving planning

Depending on the niche being served, there may be a need for other services. For example, succession planning is emerging as a vital service for business owners.

But doesn't it take a team to provide all that? It does, and this is the crunch point for a sole practitioner who wants to target the affluent. He or she does need a team -- but a virtual team rather than a true wealth-management team.

Building a Virtual Team

The virtual team has three key components ...

  • The sole practitioner serving as team leader
  • Strategic alliances with experts, either from within or outside their firm, who are capable and eager to provide needed services
  • One or two indispensable assistants who are skilled at coordinating the activities and administrative paperwork associated with a group of independent experts working together in a virtual team concept

Here are the steps a sole practitioner can follow to build that virtual team ...

  1. Decide which of the above one to three services he or she can provide with a high level of expertise
  2. Clearly define the contract agreement that he or she will use when forming strategic alliances
  3. Identify, interview, and select the internal and external experts he or she wants as virtual team partners
  4. Work with his or her assistants to integrate and coordinate everyone's efforts
  5. Establish an ongoing pattern of activities to guide and administer the virtual team's efforts

That pattern of activities is important. Here are key elements that need to be included ...

  • The sole practitioner serves as team leader.
  • The sole practitioner should attend at least the first meeting that each strategic partner has with a prospect or client. This is to ensure that the sole practitioner is viewed as the go-to financial quarterback, both by the client and the strategic partner.
  • The strategic partners should meet at least once a month to brief each other on their work with clients and coordinate their efforts.
  • The assistant(s) should maintain weekly contact with each strategic partner who is currently working with a client or prospect. The purpose is to make certain nothing falls through the cracks and to maintain a "team feeling" with the strategic partner.

Using Strategic Alliances on a Wealth-Management Team

The fact is, many true wealth-management teams find a variety of good reasons to form strategic alliances with inside and outside experts. The primary goal is to make certain that the team can meet the full range of client needs. To achieve that goal, the team may decide that ...

  • The use of a specific service is too low to warrant a paid staff member.
  • The team has not been successful in finding a staff member to deliver an important service.
  • A strategic alliance has been in place for some time and that strategic partner is too good and effective to consider replacing.
  • An existing or potential strategic partner is too good of a referral source to risk losing.

Rather than forming a virtual team around those alliances, the challenge is to incorporate each strategic partner into the existing wealth-management team's infrastructure. It is vital that each strategic partner feel they are a valued part of the team.

The pattern of activity that should drive that type of relationship should include the following ...

  • The team leader or senior advisor who serves as the team's go-to financial quarterback should attend at least the first meeting that each strategic partner has with a prospect or client.
  • The strategic partners should be included in at least one staff meeting each month, and that meeting should provide the opportunity for both the team members and the strategic partners to brief each other on their work with clients and to determine what is needed to coordinate their efforts.
  • The team's practice manager, or a specific assistant, should maintain weekly contact with each strategic partner who is currently working with a client or prospect. Once again, the purpose is to make certain nothing falls through the cracks and to maintain a "team feeling" with the strategic partner.
The common thread running through both the wealth-management team and the virtual team of a sole practitioner is the importance of delivering a consistent wealth-management experience to all of their affluent clients. The makeup of those teams differs, but the end result does not.

To help you further explore how to form strategic alliances, we have created a guide for Developing and Strengthening Your Wealth Management Competencies. To download, go to: www.oechsli.com/PM57

If you have any topic or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at [email protected].
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