The Million-Dollar Financial Advisor Team

Best Practices from Top Performing Teams

David J. Mullen, Jr.

• Publisher: AMACOM
• Year: 2018
• eBook ISBN: 9780814439210
• Topic: Business
• Subtopic: Customer Relations
• Index: Business

Based on interviews with fifteen top financial advisors, this priceless toolkit contains universal principles to guide both veteran and new financial professionals to immediate success.

This book features two complete case studies, featuring a “best of the best” advisor whose incredible success showcases the power of all the book's principles working together in concert, and an account of a remarkable and inspiring career turn around that demonstrates it's never too late to reinvent yourself.

The Million-Dollar Financial Advisor distills these success principles into thirteen distinct step-by-step lessons that teaches you:

• how to build and focus on client relationships,
• have a top advisor mindset,
• develop a long-term approach,
• and much more.

 

Brimming with practical advice from author David J. Mullen and expert insights from his interview subjects, The Million-Dollar Financial Advisor equips any financial advisor to succeed--regardless of market conditions.

1

The Case for Teams

One of the best descriptions of a team that I have seen is from Jon Katzenbach, an organizational consultant, who describes a team in the following way: “A small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.”

Teams are the future of financial services, and experts have repeatedly shown that advisors working on teams outperform sole practitioners. Recently there was an extensive study done by PriceMetrix that quantified the value of teams. In this study, the researchers found that teams have a higher propensity to do the right things that cause their business to grow. The study also found that the increased accountability of working on a team promoted a higher level of discipline in individual team members. The PriceMetrix study also showed that teams have 17 percent more assets than sole practitioners. In fact, clients have shown a greater willingness to consolidate their assets with a team. Teams retained their most affluent clients longer and had clients with more assets. The study also revealed that productivity was higher for advisors on teams, with assets growing at an 11 percent higher rate and revenue 17 percent higher.

My own observations of working with many of the top teams in our industry is that for an advisor who aspires to reach a million- and ultimately a multimillion-dollar practice, being on a team is essential for the following reasons:

•  Accountability. Financial advisors, like everyone else, perform better when they are accountable to someone. A highly functioning team has accountability through clearly defined roles and responsibilities, performance reviews, and compensation. This level of accountability is not possible for a sole practitioner.

•  Idea Sharing. Financial advisors who work together to achieve common team goals are able to strategize and share ideas on how to improve their practices. This extends to marketing, portfolio management, client service, and improved team processes.

•  Resources. Pooling resources together to invest back into the team has significant and positive ramifications for team growth. Having more money to invest in administrative members, marketing budgets, and client service increases productivity.

•  Client Driven. All the research I have seen and my own experience validate that clients prefer working with a team as opposed to a sole practitioner. The primary reasons are a transparent succession plan, better service, and more depth of expertise. The more satisfied the clients, the more assets, more referrals, more business, and higher retention the team will get from each highly satisfied client.

•  Succession Planning. This allows the individual clients to feel confident of the continuity of their relationship with the team. It also provides peace of mind to the advisors that their clients will be taken care of when they exit from the business, as well as creating enterprise value upon retirement for the partners.

•  Increased Capacity and Delegation. Having multiple team members with different responsibilities enables each individual team member to specialize and focus more on their primary areas of expertise. Individual FAs can focus and spend more time with fewer, more affluent clients. They have more time to prospect because of the increased capacity. Delegation enables financial advisors to spend much more of their time on what I call the big three: developing and implementing their wealth management offering, contacting their best clients, and prospecting new affluent clients.

•  Client Communication. One of the great values of a team is the positive impact on perception that it has for the team’s clients. Clients consider it a benefit when they know what’s going on with their advisor’s team: knowing there is a succession plan in place, and that when their financial advisor is away from the office they are still covered. Introducing the new team and sharing the benefits should be among the highest priorities a newly formed team has and should be one of the first things to do as the team is formed.

TYPICAL TEAM CHALLENGES

One of the most powerful forces that drives teams to perform at a high level is synergy, the interaction of two or more entities to produce a combined effect greater than the sum of their parts. A synergistic relationship between team members occurs when they brainstorm over ideas to improve their practice, hold each other accountable, have a division of labor where they contribute their different talents to overall functioning of the team, pool financial resources so they can attract and retain high-quality employees, and back each other up when one of the partners is out of the office.

A team of financial advisors is one of the best examples of synergy: When two or more advisors come together they are more productive than they are individually. This powerful force of synergy is what is responsible for highly functioning teams to perform at such a high level.

However, the force of synergy can be reversed with a dysfunctional team. A lack of synergy creates chaos, confusion, infighting, and lower productivity. This occurs largely because of the emotional impact and time wasted on dealing with issues that cause a team to be dysfunctional. Think of a dysfunctional marriage.

The two most common causes of reverse synergy:

1.     Poor planning when forming a team. Unfortunately, one of the negative impacts of the evolution and proliferation of teams is that teams have been hastily formed without proper due diligence prior to the team’s formation. So many advisors feel they are missing out by not being on a team that they form a team just for the sake of being on a team. In my experience, there are too many teams that are functioning at low levels because not enough time was spent during the formation stage of team building. In many ways teams are like a professional marriage, and while no one would argue that a good marriage is always blissful, a bad marriage is miserable. We know that 50 percent of marriages fail as a result of being dysfunctional, and I believe the same is true with financial advisory teams.

2.     Lack of alignment in personal values. One of the biggest causes of a dysfunctional team is that individual team members’ professional and personal values are not aligned. Just as most individuals that can maintain a long-term successful marriage would attribute that success to shared values, the same is true for a financial advisor team. Examples of shared professional values include investment philosophy, commitment to professional development, the wealth-management process, long-term goals, work ethic, service commitment, retained earnings vs. money reinvested back in the business, target clients, infrastructure of the practice, ethics, and trust.

The top advisor teams all have these common shared values. Personal values that should be evident include:

       1.  Putting the team ahead of individual needs

       2.  Committing to always doing the right thing for clients and team members

       3.  Recognizing all members of the team

       4.  Overcompensating high performing and loyal team members

       5.  Being client-focused

THE NEXT STEP

Having been part of a team and having worked with countless teams as a manager and professional coach and trainer, I can say without a doubt that teaming makes sense and every advisor should strongly consider forming or joining a team. In the next chapter, you’ll learn what the secret sauce is for creating a highly functioning team.

2

Forming a High-Functioning Team

Being part of a high-functioning team is preferable to being a sole practitioner, yet a poorly functioning team can yield the opposite effect. The make or break of a team’s success is making sure it includes the right people. In so many ways it’s like a professional marriage—the institution of marriage has stood the test of time and very few will argue the benefits of a good marriage. However, the key to a good marriage is who you marry; being in a bad marriage is worse than not being married at all.

Once you make the people decision you can determine the right structure. The structure will drive the right implementation of building a highly functioning team. When I think of my own experience in forming a team, the most important factor was the character and the values of my future partner. I trusted him, I admired his worth ethic, his ambitions were aligned, I liked him, and I respected him. All the other reasons for forming a team were present and have been described in detail, but without the right person none of those other benefits mattered.

UNDERSTANDING THE DIFFERENCES IN TEAM STRUCTURES

With the right people and in the proper situation, any one of a variety of team designs can be very effective. Vertical teams keep things simple and allow the financial advisor to keep control and guide the direction of the team. Horizontal teams can create great synergy yet may develop leadership issues. Alliance teams are easy to put together and allow for team ind...

Table of contents

• Contents
• Introduction
• 1. The Case for Teams
• 2. Forming a High-Functioning Team
• 3. Create a Vision
• 4. Assigning Roles and Responsibilities
• 5. Performance Reviews and Measurements
• 6. Team Compensation
• 7. Team Communication
• 8. Best Practices for Hiring
• 9. The Product: A World-Class Offering
• 10. Building a Marketing Division
• 11. Developing Processes
• 12. Team Leadership
• 13. Highly Functioning Team Case Studies
• Appendix A: The Team Best Practices Checklist
• Appendix B: Process Gap Analysis Form
• Index