Journal of Financial Planning: May 2023
As an experienced financial adviser, practice management consultant, and Carson Coaching executive business coach, Michael Rose leverages 20 years of industry experience when guiding advisers to the level of success they desire. Carson Coaching is the official coaching partner of the Financial Planning Association.
Most advisers recognize that an expanding and evolving team is a fundamental attribute of a firm that will scale up successfully. At the same time, attracting and retaining top talent is a challenge for many firm owners. Indeed, issues relating to talent are the most common issues that Carson coaches work on with our coaching members.
So, how can you solve for this? What’s the success recipe for team development? How do you create a team that sticks with you while learning new skills and delivering a client engagement model that inspires referrals? In my experience, it comes down to these five components:
- Clearly defined and openly communicated roles and responsibilities.
- Have honest, ongoing discussions about career path and compensation.
- Conduct meaningful biannual performance reviews.
- Allow for job shadowing and role-play.
- Lead by example.
Below I describe how you can put these five critical functions to work at your firm.
Clearly Defined Roles and Responsibilities
I am purposefully avoiding the term “job description” here because I know it causes lots of eye-rolling and sounds as interesting as watching paint dry. However, if a team member is to meet or exceed your expectations, both parties must understand exactly what those expectations are.
For each role in your firm—including your own—document principal functions so that everyone knows how success is defined. Performance reviews, bonuses, and career advancement likely depend on how well team members execute the activities described in this document. If appropriate, lean on this document during performance reviews.
Career Path and Compensation
The team members you most want—quick learners who are engaged, have a pleasant demeanor, and enjoy helping people—will understand they have options as they gain experience and manage their careers. You want to be in front of this. Employ a consultative approach as you guide staff in understanding how their skills and preferences align with the needs of your growing firm. What is the gap between where they are now and where they want to be, and how can that gap be closed? What are the specific milestones that indicate it’s time to advance to the next level? Set expectations by disclosing reasonable time frames.
What options or career tracks exist within your firm? I observe that many new hires believe there is only one job worth having at an advisory firm—adviser. You are wise to dispel this myth. Few people are truly cut out for the adviser role, and more importantly, there are many ways in which team members can contribute significantly to a firm’s prosperity. A championship team has skilled players in all positions.
Here are a few specific examples to consider: Some firms are wisely separating the planning function (detail, analytics, and software) from the adviser function (consultative, nurturing, and goal achievement). A team member who prefers wrangling the data-centric intricacies of financial plans and the ever-changing regulations rather than managing client relationships may be a better fit for a dedicated planning track.
Operations leadership is a crucial but often overlooked position. A few years ago, I wrote a blog post titled “The One Thing That Will Most Transform Your Business Now.”1 It describes the powerful impact that hiring the right director of operations can have on a thriving firm. An effective director of operations removes distractions and unwanted responsibilities from the lead adviser, enabling them to focus on what they do best. It also benefits the team by providing a capable, engaged manager who serves in this way.
And regarding the adviser role itself, it can be separated into several levels with different areas of focus. Whether you look at adviser job descriptions from Fidelity, Schwab, Carson, or other firms, a key element of the lead adviser description is new client acquisition. But I know a lot of great advisers who don’t have rainmaking in their DNA. The service adviser role is ideal for someone like that. This level allows them to focus on taking care of clients and spotting untapped opportunities in the existing book rather than being forced to meet and close prospects, areas in which they may not excel. I admire the finder, grinder, minder framework for the key functions of any professional services firm.2 For advisory firms, the lead adviser is the finder, your operations team is the grinder, and the service adviser is the minder—the one who looks after clients and breathes life into the ongoing, multigenerational client–adviser bond.
Hold regular discussions on career path status and timing with each member of your team. The semi-annual performance review, described below, is an ideal time to do this.
Thoughtful, Meaningful Performance Reviews
I’ve been working with advisory firms of all shapes and sizes for a long time now, so I should no longer be shocked by the number of firm leaders who do not hold regular performance reviews with their staff. But I am!
Everyone deserves to know how well they are doing in the eyes of the person who appraises their performance and controls their bonus and salary increases. It’s natural for employees to want to know whether they are meeting the boss’s expectations, and where they may need to course correct to advance along their chosen path.
Performance reviews do not have to be complicated or arduous. Find the right tool or method that promotes a genuine dialogue regarding successes and challenges. There are many templates available online. The leader should not only provide a thoughtful assessment of the team member’s performance, but also seek input on roadblocks that prevent the employee from contributing at their peak level. “How can I help you achieve your goals and be more successful?”
Here’s a tried-and-true method that is both easy to remember and simple to execute: start, stop, and continue. You always want to begin with positive reinforcement, so continue should be up first. It rolls out something like this: “Bill, here are the areas in which you excel. You’re doing a great job at x, y, and z and we want you to continue performing those activities as you have been. Next, here are a few things we would like to start doing that we haven’t seen yet. And lastly, let’s talk briefly about the activities or habits we’ve noticed that we would prefer you to stop.”
Many advisers abhor performance reviews and secretly wish someone would take it off their plate. Guess what? That can happen! If you wish this task would disappear, hire a skilled director of operations with demonstrable management experience and delegate this all-important function.
Job Shadowing and Role-Play
For team members on an adviser track or in other client-facing roles, observing the lead adviser in client reviews and prospecting meetings can be illuminating. I often say to coaching members that there are some things people learn best when working independently, but there are some things one only learns when seated at the feet of the master.
Many advisers have team members shadow some of their calls or Zoom meetings. If you’re not one of them, I encourage you to begin this right away.
If you want to take this idea to the next level, here are two approaches that may help. First, rather than having a team member simply sit in on a client meeting, take it a step further and set up a time shortly after the session to debrief. What did they learn? What did they perceive as the most important takeaways or outcomes? What do they think worked well and what could have gone better? These questions reinforce their learning and help you guide their evolution and skill mastery. Spending time with up-and-coming advisers and service personnel in this way communicates as loudly as anything could that you are interested in their success and advancement.
Role play is another great teaching tool. When I was an adviser back in the day, the leader of our private client team had the most persuasive, client-friendly responses to any objection or client inquiry that might arise. I remember so many times asking her, “What do you say when a prospect says . . .” Golden nuggets, compellingly and articulately rendered, would come rolling off her tongue. I learned a lot from her.
You can provide the same benefit to your team, but be aware they are unlikely to pursue this unless you make it clear you invite this activity: “Hey everybody, ‘Lunch and Learns’ every Wednesday at noon in the conference room! Bring your questions and most perplexing challenges.”
Lead by Example
Some say that culture eats strategy for breakfast. To a very large degree, firm culture emanates from the firm leader. We all know that “do what I say and not what I do” doesn’t really work. Your people are watching you. They will learn what is appropriate and expected in your organization by observing your words and actions. Your behavior matters.
Check in with yourself periodically to assess how well you are doing at guiding the individuals on your team and being the cultural North Star. Are you friendly and approachable, or are you abrasive and perpetually harried? Are you planful and well organized? Ask your team, too. Rather than a sign of weakness, I believe it’s a sign of strength to ask for input on how effective you are in your role as a team leader. Annual strategic planning sessions are a great time to have this conversation with the entire group.
Being a capable and concerned leader involves many things, including mentoring and guiding employees in their professional unfolding. Because it impacts financial measurements, the fulfillment you experience in your day-to-day work activities and your succession plan, nurturing your team as described above deserves your time, energy, and conviction. And remember, if you cannot or will not do this, hire a skillful director of operations with a lot of team leadership experience to carry this torch for you.
Endnotes
- Rose, Michael. 2020, January 10. “The One Thing That Will Most Transform Your Business Now.” Carson Coaching blog. www.carsongroup.com/insights/blog/the-one-thing-that-will-most-transform-your-business-now/.
- Read more about the Finder, Grinder, and Minder framework from Forbes at www.forbes.com/sites/keenanbeasley/2017/09/20/team-building-minders-finders-grinders/?sh=6edd2da5742c.