In a previous article, I discussed three keys for successful professional collaboration. Here I’ll focus on the key traits of high-performance teams, how to expand your referral network within high-net-worth families and why you don’t want to go it alone when it comes to complex client situations.
For years, my colleague Rod Zeeb and I have been recommending Dr. Tim Baker’s Eight Attributes of High-Performance Teams. One of Baker’s most important attributes is participatory leadership. Rather than having a single leader, participatory leadership lets the colleague who’s most knowledgeable about a particular situation be the leader. When the work is done, that leader steps aside and a new leader takes over—someone who’s most knowledgeable about the next assignment. Over time, everyone will get a chance to lead.
High communication is another of Baker’s most important attributes for great teams. When everyone on the team is aligned, no matter who gets a call from the client, the message and rationale for the team’s decisions will be the same, On a recent podcast with me, Zeeb said high communication is also about having an open dialogue within the team when one or more members has reservations about a solution the group is planning to recommend. If a team member says: “Hey, I really don't like this idea” or “I've investigated this, and I think it's too risky,” then you need to get the issues out on the table and resolve them ASAP so you can have a consensus.
The most important thing is for the team to clear up the confusion internally before presenting to the client with a mixed message—or with a solution that doesn’t have unanimous buy-in.
Real World Example
An advisor called me the other day for advice about a client who was selling a business. The advisor needed help mitigating the business owner’s tax hit post-sale. However, when I read the thread of emails she sent me, there was no data. I only saw cryptic notes such like these: “Father selling son the business. Wants this much money out of the business over this many years—and wants to minimize this tax.”
I told the advisor, here’s the information I would need to know before proposing a solution to your client:
- Is there a tax?
- How old is the dad?
- Is there only one child in the business to support the payments?
- Are there other children who aren’t in the business?
- Is it an S corporation? Is it a C corporation?
- Does the cash flow support the proposed buyout?
- What other assets do they have available?
- What is their health?
- And about 10 more things …
The advisor replied: ”We've already asked the client’s accountant for this, and you know, he just won't give it to us.” Ouch! That's a disaster waiting to happen when people working on the client’s behalf are not forthcoming with information. Very often, there’s is no quick fix solution. There are probably three or five solutions, and you need to talk about them together.
With a good collaborative team, everybody has an open lens, and you’ll get some creative solutions that would be hard for anyone to come up with on their own.
I recall one of my most successful clients had a $25 million estate. Amazingly he didn’t have an estate-planning attorney. He tried to cobble together his estate plan with an inexperienced general attorney. All he had was a living trust—and even parts of that living trust weren’t done correctly. Fortunately, my client agreed to let me bring in a top estate attorney to uncover various wealth transfer solutions.
As we got toward the end of our 2020 planning, the question became: “Are we going to do a sale transaction or a gift transaction?” After the team had a detailed conversation, the original plan to do a sale transaction evolved into: “Let’s use his exemption by making a gift instead of doing a sale. Who knows if we’ll have this big exemption going forward?”
This outcome never would have happened if I had just worked alone on the planning. My client likely would have missed out on this valuable tax saving opportunity.
Zeeb believes you must also spend a little time training your clients to work with your team of advisors. The client can’t take sides. They must commit to the team (as a whole), not to any one of the advisors individually. The client can’t come to you and say: “Well, they want to do this, but I want to do this.” Your job is to get the team “aligned on purpose,” as Baker would call it.
On good teams, no one is going to be running behind anyone else’s back trying to disintermediate the other advisors. Sure, many advisors have agendas. The life insurance specialist wants to sell a life insurance policy. The estate attorney wants to draft the limited liability company documents. There can be a lot of forces pulling in opposite directions if the team members don’t have a good relationship with each other.
As Zeeb likes to say: “It really is incumbent on all the members of the team, to be members of the team.” In many complex cases, you’re working with the largest single client for at least one of the team members. You need to respect that. Everyone wants to be THE guy or THE gal for their client. But collaboration won’t work unless they’re willing to trust and continually loop in their fellow team members, Zeeb added.
Grow Within the Family
We all want to make money and be the most trusted advisor for our clients. But if you’re willing to be a good team partner, that HNW client is probably worth 10 of your average clients. If you get a good team result for the client, they’ll likely have lots of HNW siblings, cousins and other family members in the business who all might need your help. If you play your cards right, there's an opportunity for the team to win the whole family as a client.
Don’t Be a Lone Wolf
In the HNW marketplace, you need a team to be successful. Sure, you can be a one-trick pony who just sells insurance policies or who just drafts trust documents or just manages small amounts of money. If you want to do comprehensive planning for a client—real planning in which you’re projecting and repositioning and doing all the things that need to be done—you can’t go it alone. You must be able to work with other people. I know If I don't collaborate, I starve. Fortunately, collaboration is the most natural thing in the world for me. But for other advisors, it’s more of a leap.
According to Zeeb, egos can get in the way when seasoned experts get together. It’s natural for advisors to want to be the top dog with the client. Also, it can be stressful if you haven't worked on an outside collaborative team before, and you suddenly have lots of other people interfacing with your client. No one wants to have another advisor appear more knowledgeable or more experienced than they are in front of their best client.
Collective Knowledge
Again, that's one of the powers of having a good collaborative team. As Zeeb likes to say: “Everybody in the room probably knows something you don't know. But I probably know something that none of the others know.” When you can tap the collective knowledge of the team—all working together on behalf of the client—that’s when you get the best possible result. Ultimately that’s what collaboration is all about.
For more about professional collaboration, see my recent podcast with Rod Zeeb.
Randy A. Fox, CFP, AEP is the founder of Two Hawks Consulting LLC. He is a nationally known wealth strategist, philanthropic estate planner, educator and speaker.