Teams and partners
Why should I form a team or partnership?
Forming a service team or partnership allows you to increase your capacity, focus on a specialty, and share in the successes and challenges of the business. Studies have shown that individuals in teams often produce greater revenue and gather more assets than sole practitioners. Some teams and partnerships operate vertically with one distinct boss. Others form horizontal "partnerships of equals" where two or more FAs share management. Consider how willing you are to give up control over aspects of your business to a partner, or whether you want to manage a staff of employees. In any case, whether you form a team or partnership will depend on the availability of potential partners or team members who align with you in the following critical areas: vision, integrity, work ethic, and preferred client type.
How many members should I have on my team?
To determine the right number, and to avoid unnecessary hiring, assess your workload. Determine how long it takes you to perform each of the ten core functions of your business. It’s a time-consuming process that may take several days, but will help you more clearly view team member roles and determine whether you’ve got enough people to handle the volume of work.
How can I manage my team better and hire more effectively?
You first have to have a team vision and plan that articulates clear goals around business functions and allows team members to sense ownership. Make sure each team member clearly understands what’s expected of him or her. Let them participate in setting goals for their area of responsibility. Conduct regular team meetings to communicate about potential problems and assess progress. When hiring, consider taking advantage of hiring tests to hire winners more consistently.
How can I have a better relationship with my sales assistant?
The biggest cause of frustration in working relationships is unmet expectations. Make sure you know what your sales assistant expects of you and that your sales assistant knows what you expect from him or her. Give them ample opportunities to express their ideas and be sure to show your appreciation. Take your assistant out to lunch and ask them to rate their job satisfaction on a scale of 1-10. Ask them what it would take to create a 10. Remember that "more pay" doesn’t always drive satisfaction. Often, assistants want more recognition, or more opportunities to receive career training. In any case, you’ll never know what makes your sales assistant happy until you ask.
Personal productivity
How can I make more efficient use of my time?
Effective time management, like fiscal management, involves making prudent choices. And, just as tracking expenses is vital to developing a sound budget, effective time management depends on being conscious of how we spend time. We often set unrealistic goals because we don’t realize how long it takes to accomplish something. As such, it’s vitally important to quantify how much time is required for a portfolio review, for instance, or how much time you spend, on average, responding to client questions each day. Once you know where you spend your time, you can focus on your highest priorities. Time-blocking, an underutilized, powerful technique, allows you do to this by setting aside time for important projects, in effect creating a distraction-free zone. To make time-blocking work for you, time management experts suggest setting appointments with yourself.
What technological tools do I need to be efficient?
It’s essential to have an effective contact management system that ties into your calendar. Use contact management software for each step of your client interaction. Good asset allocation and financial planning programs are also important tools.
How can I stay more organized and productive?
You first have to have a team vision and plan that articulates clear goals around business functions and allows team members to sense ownership. Make sure each team member clearly understands what’s expected of him or her. Let them participate in setting goals for their area of responsibility. Conduct regular team meetings to communicate about potential problems and assess progress. When hiring, consider taking advantage of hiring tests to hire winners more consistently.
How can I reduce the number of hours I work?
The old adage "work smarter, not harder" definitely applies to this business. Perhaps you are servicing clients into the night because you have too many clients. Evaluate your book to assess whether more than 80% of your revenue is coming from fewer than 20% of your clients. Try pruning your book to weed out dead-wood clients, or those with unreasonable demands. Some advisers find that after pruning, their businesses reach new heights, with less effort. If too many clients is not your problem, consider going after a specialty so you can better leverage your time. Remember, it’s easier to meet the needs of a narrowly defined niche than a diverse group of investors. Finally, consider building a team to help share your burdens.
Strategic alliances
What is a strategic alliance?
A strategic alliance is a mutually beneficial relationship formed by individuals in complementary professions allowing both parties to access new prospects, and deliver better client service. Think of it as adding muscle to your practice. If you specialize in solving the financial challenges of women in divorce situations, for instance, a relationship with a respected family law attorney would likely provide you with a steady stream of referrals, and would give you joint marketing opportunities. Your clients would be served because you could refer them to a competent attorney. Strategic alliances are becoming more common as professionals attempt to offer clients one-stop shopping. Clients like to know that the professionals in their lives are working together for their benefit.
What’s the best way to form a strategic alliance?
Strategic alliances can be formal or informal. An informal alliance would simply be a loose agreement to provide referrals, and perhaps, conduct joint marketing. Formal agreements range from splitting commissions and fees to in some cases, forming an equity partnership. Check with your firm to see what revenue sharing arrangements are available to you and what is allowable by state law. The most important aspect of a strategic alliance is trusting the other party, and having a good working relationship—after all, you’re entrusting your clients to them.
What pitfalls should I avoid when forming a strategic alliance?
The biggest pitfall is getting into a hasty alliance that doesn’t have the potential to help you meet your business objectives. You should avoid wasting time and energy by "barking up the wrong tree". Make sure the professional you’re aligning with serves the same type of market you’re interested in prospecting. And, make sure you understand what they’re looking for in a relationship. You may spend a lot of time referring individual tax return clients to a CPA, and they may not be so appreciative as you’d imagined. Finally, you might try out some less formal types of arrangements, such as a joint seminar, for instance, to test the waters of your alliance, before agreeing to formally split fees and commissions. You want to make sure that you can trust your strategic partner, and work well with them.
What resources are helpful in identifying strategic alliances?
There are three major methods for locating potential strategic allies. The first, and perhaps most common, is to simply ask your clients for the names of the other professionals they work with, such as their accountant and attorney.
Professional development
How can a professional designation help my business?
Like an advanced degree, professional designations give you greater credibility and in-depth knowledge in a particular subject or field. A growing number of clients informed by consumer publications, are looking at credentials when making decisions about with whom to entrust their financial nest eggs. Furthermore, the knowledge you gain from completing your credentials can make you a much more effective adviser.
What professional organizations can help me?
A host of organizations offer career-enhancing information and opportunities. To keep up-to-date on what’s happening in the financial planning community, try the Financial Planning Association (FPA) or the Certified Financial Planner Board of Standards.
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