Skip navigation

Forming An Elite Team

Teams are easy to form, but it's another thing all together to make that team function optimally. The most common mistake advisors make is forming a team without doing the proper homework.

Kansas City: "It seems as though the affluent prefer working with a team rather than a single advisor," said Jack. "I'm curious about your thoughts on teams because I'm seriously considering teaming up with someone in the office."

Today, approximately 50 percent of financial advisors are involved in some sort of team arrangement, and the rest are very curious about it. Nearly every time I talk about our affluent or team research, some sole practitioner tells me he is considering either joining an existing team or hooking up with another advisor and forming a team. I often find myself voicing caution.

Teams are easy to form, but it's another thing all together to make that team function optimally. The most common mistake advisors make is forming a team without doing the proper homework.

Warren Buffet has a knack for simplifying complex issues. When it comes to working with someone, he has three requirements: integrity, work ethic, and competency relative to the job. Buffet considers these essential elements for a successful working relationship and says they are not teachable. If one of the elements is lacking, trouble will surface at some point.

Our research into elite teams is in synch with Mr. Buffet's assessment. This first step in team building--choosing the right partners--is crucial to the team's success. We have developed a checklist for advisors to follow when selecting the members of a team. This checklist can be used by an advisor who is considering forming a team or joining an existing team, or by a team that is running into internal challenges.

I began to share these with Jack and I could see his eyes glaze over well before I was finished. My advice to him was to go slowly and use our Team Forming Checklist before taking any drastic steps.

Whenever advisors are considering forming a team, there tends to be both excitement and anxiety. People are cautiously optimistic. Individual roles and responsibilities are unclear, and team members are often guarded in their interactions. You have to get the right people on board, for the right reasons, with the right work ethic, the right integrity (total), the right core competencies, and a compatible goal focus - both business and personal. It's no wonder so many teams blow through this critical stage of development.

Because of space constraints, the following is a sampling of our Team Forming Checklist (8 of 15 items) we use to help advisors take the proper steps at this stage. This should provide you with an idea of what is involved as it's here that most would-be teams fail to exercise proper due-diligence. If you're interested in the entire Team Forming Checklist, you can access a version through our free download center.

Forming Checklist (8 of 15 Criteria)

1. Trust. You need a 360-degree circle of trust, meaning you must have complete trust in your partner(s), and they must have complete trust in you. This integrity component is essential to a team's long-term success.

2. Compatibility. Although trust is essential, you also must be able to get along in a high-pressure business environment. This is not the same thing as enjoying each other's company socially. The following graph is taken from our 2007 and 2009 studies on financial teams. We asked these teams, "How important is it for team members to share common values for work effort, work quality and client service?" As you can see quite clearly, what teams consider extremely important is not always connected with their day-to-day reality. That said, 96 percent of teams found these shared values to be "very" to "extremely" important. And yet, few truly take this into consideration when forming a team.

3. Work Ethic. Whenever one partner perceives that he or she is working harder than the other, resentment surfaces that will ultimately lead to conflict and could destroy the team. Everyone must agree on the desired work ethic prior to forming the team.

4. Competency. This should go without saying, but all team members must be fully capable of performing well in their areas of expertise. History is a fairly good indicator. For instance, if a partner has acquired very few clients over the past 12 months, he or she will probably struggle in marketing the team - a.k.a., Rainmaking.

**You'll notice that we have incorporated Warren Buffets three essential criteria.**

5. Comprehensive Business Plan. Each partner must agree on the team's vision -the long-range goals, ideal client, number of ideal clients, assets, revenue, services provided, etc. This is essential for creating a "critical path" that the team will follow as it grows.

6. Clear and Unified Goals. Each partner has to buy-in to annual team goals, meaning they must subjugate personal goals to the collective goals.

7. Clear Roles and Responsibilities. Every team member should have a clear role and delegated areas of responsibility prior to forming.

8. Partner Contribution Clarity. Each partner should have a clear understanding of his/her individual contribution to the team's annual goals. Procedures should be in place for making partner compensation adjustments if one partner exceeds individual contribution targets, or falls behind.

It doesn't take long to realize that, done properly, putting together the right team requires a lot of work, which is why some steps are frequently skipped. This is a mistake that you must avoid. If you determine that your team is stuck in its quest for becoming an elite team, you might want to revisit this Forming stage; using our checklist would be a worthwhile exercise. If you are interested in the complete Team Forming Checklist, visit our free download center.

Advisors can no longer take shortcuts if they expect to have success with today's affluent investor. Forming a team will only give Jack an advantage if he can develop it into an elite team.

*parts of this article are excerpted from Matt Oechsli's latest book Elite Financial Teams: The 17% Solution.

Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one.

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

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.