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Avoid the Self-Fulfilling Prophecy: “I’m Not Good at Managing People”

I’ve often heard advisers say that they are not good at managing people. I want to shake them and scold, “Don’t say that!” When you make such a declaration, you are doing nothing more than creating an excuse for not improving your skills. You may even be creating a self-fulfilling prophecy, in which your assumption that you aren’t good influences your behaviors and actually causes you to be less of a good manager than you naturally would be.

What Do Employees Want from Their Manager?
You can make a huge improvement in your self-perception, as well as in the perception of your employees, by focusing on some basic employee needs. Among the things employees want, there are two items that stand out, according to research by Gallup: knowing what’s expected of them and how they are doing in meeting those expectations.

These are fundamental needs of employees. That’s why human resources departments tell managers to have up-to-date job descriptions (to define what’s expected) and give employees performance reviews at least annually (to check in about whether expectations are being met). These two actions are not much to ask of an adviser and require that you learn just a couple of skills:

  • How to work with an employee to create a job description
  • How to have a meaningful conversation with an employee about his or her performance

Investing in Your Employees
A little time spent defining roles and responsibilities can go a long way for an adviser who wants an employee to be an important part of the future of his or her organization. Existing employees can be asked to do much of the task.

If you start with an employee who does not have a job description, give him or her a template that asks the employee to outline the key five to eight responsibilities of the job. You can make your own list for that position and then compare the two lists together to create an official description. From there, you can add the values you want to drive internally among everyone who is associated with the firm.

Use the description as the basis for performance reviews. A job description, although not perfect, is a good benchmarking tool and certainly better than using nothing. Again, work from a template to give employees the opportunity to outline how they think they have done in fulfilling their position’s key responsibilities over the past six months or year. If you do the same thing, comparing assessments will give you the fodder for great conversations regarding each employee’s performance.

Half the battle is making this investment in employees a priority and taking the time to do it. Based on the above approach, the time investment is really only a few hours per employee. That’s a good return on investment for employees whom you want to be part of the future of your firm.

Is that all you have to do be a great at managing people? No, but it’s a good jumping-off point. Above and beyond defined expectations, employees are highly influenced by the culture of an organization. We’ll talk more about that next time.

Joni Youngwirth_2014 for webJoni Youngwirth
Managing Principal of Practice Management
Commonwealth Financial Network
Waltham, Mass.




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Delivering Prestige Efficiently

A structural reality defines professional services businesses in which the producing unit – the practitioner—has a certain number of hours each day for delivering services. Therefore, economic reasons direct wealth advisers to court high net worth (HNW) investors because, for a given hour of advice time, a client with higher assets under management is more profitable than one with fewer.

An investor with at least $1 million in investable wealth represents the AUM target prospect, and, so it is with most every other advisory firm. In competitive local markets, each top client is a firm’s important asset, but a juicy plum for a competitor to steal.

Prestige as a Competitive Mandate
Cachet. Exclusivity. Status. Prestige. These synonyms reflect aspirational qualities marketed to HNW individuals for a wide array of products and services. Wealthy clients know they’re in demand and most grow accustomed to the attention.

In the advisory market, firms compete with their own aspirational services in order to gain new clients and protect existing ones. It’s now a competitive mandate for advisers targeting the high AUM strata to have specialized services such as a “Prestige Package” separate from services provided to clients of lesser wealth.

Prestige within Core Requirements
While some private banks and multi-family offices lavish non-investment services—such as art appraisals, travel services and an on-demand concierge—the actual competitive turf has three core services: planning quality, investment returns and responsive communication.

A firm that fails to deliver one or more of these three services risks losing a client irrespective of fancy offices or convenience services.

Still, within these core services, top clients want to be treated special, and those firms that create prestige achieve differentiation. These competitive advancements raise service expectations for HNW clients, and this brings a three-pronged business challenge: 1) the ability to raise prices is crippled; 2) adding services increases costs; and 3) per-client profits decline.

Engineering Prestigious Services for Increased Profits
By way of illustration, let’s look at each of the core services and consider a high-end service that can be delivered profitably:

Core Service No. 1: Planning Quality
A large portion of an adviser’s top clients are (or soon will be) in the wealth distribution and transfer stage. This means that trust planning is a prime focus. Collaborating with one or more trust and estate attorneys makes advanced planning much more efficient than if the adviser operates independently. South Dakota and Alaska trust companies cater to wealthy families and have a wide array of packaged solutions easily accessed by advisers (and collaborating attorneys) in volume.

Core Service No. 2: Investment Returns
Tax alpha is a set of actions an adviser takes to produce higher after tax returns such as tax loss harvesting, asset location, income shifting and product selection. It is a high-value, high-demand service in the vein of “It’s not how much you earn, but what you keep.” See 2015 US Trust study titled “Insights on Wealth and Worth” and August 2015 “Russell Financial Professional Outlook”. Since the amount of tax alpha production is driven by the client’s bundled tax rate (i.e. federal and state), those clients with the highest incomes gain the most benefits.

Instead of the laborious and customized way tax alpha is currently delivered, adviser-focused variable universal life (registered and private placement versions) allows an adviser to produce a customized tax alpha portfolio that has true tax-free growth, income and cash access, all produced in a single step with low costs. (Note: the associated tax-free death benefit also has important planning applications for wealth protection and replacement.)

Core Service No. 3: Responsive Communication
Top clients expect personalized attention from their adviser given the fees that they pay. One-on-one meetings are important for relationship-building. However, for longstanding clients, periodic educational events with a group of like-minded clients offers many advantages: 1) the adviser’s time is used efficiently; 2) clients appreciate meeting others in similar circumstances; and 3) group discussion about an educational topic adds more robust dimensions.

A Profitable Mandate
An advisory firm receives substantial business benefits for each HNW investor gained, and pain when one is lost. Given top clients’ importance, allocating R&D time each month to expanding services in a scalable way is time well spent. For each advancement a firm makes in its HNW service package, it moves up the curve from a competitive mandate to market leadership.

Kirk Loury

Kirk Loury
Wealth Planning Consulting Inc.
Princeton Junction, New Jersey

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3 Keys to Creating an Engaged Workforce

What does it take to have an engaged workforce? Is it a ping pong table in the breakroom and unlimited vacation and sick pay? Is it a flexible work environment allowing employees to set their own schedules?

If your eyes were rolling and you were wondering just how you were going to make that happen, worry no more. According to research conducted by Gallup®, these types of fringe benefits are not what make an engaged workforce. The things that do will cost you less in hard dollars yet require you to engage with people, who are often confusing and sometimes overwhelming. Engagement in the workforce is the same as the romantic engagement, it happens between people.

There are three keys to creating an engaged workforce:

  1. Selecting the right people seems so obvious, yet all of us have either hired or had to work with someone who just wasn’t the right fit. Good hiring goes beyond the ability of someone with the skills to perform the job. Mindset, attitude and culture also play an important role. Beyond the initial hiring process, what weighs more heavily in employee engagement is selecting the right managers. More often than not, people don’t quit jobs, they quit the manager. When you consider the process by which most managers get selected, they are either star performers or have been with the company the longest, so it’s easy to end up with managers not prepared to manage others. When selecting a manager, focus on their ability to get to know and develop others while keeping an eye on the metrics that drive performance.
  2. Developing employees’ strengths will be one of the most productive roles your manager performs. According to Gallup®, employees who have the chance to use their strengths every day are SIX TIMES more likely to be engaged on the job. Remember what the lack of engagement can cost? Managers are uniquely positioned to come to know and develop the strengths of the people on their team. Using a tool such as the Clifton StrengthsFinder® assessment will help both the manager and the team better understand the unique talents of each individual as well as the potential that lies within.
  3. Enhance employees’ well-being. This at first glance appears to be a rather large undertaking. If we break it down, we can see how a company and its great managers can influence well-being. Most people spend at least one-half of their waking hours in the work environment and we know that work influences home and personal life and vice-versa. In studies conducted among its client groups, Gallup® has found that engaged employees are generally in better health and have healthier habits than those not engaged. In turn, these engaged employees have fewer chronic health problems and miss fewer days of work. These are also the same employees likely to participate in a company-sponsored wellness program. Well-being also includes community and social involvement as well as financial well-being. An entire book could be written on just this topic, and it has! Well-Being by Tom Rath and Jim Harter is a great compliment to the StrengthsFinder 2.0 book and the assessment.

So where should you start in engaging your employees?  A conversation focusing on strengths can go a long way in engaging your workforce. Take the Clifton StrengthsFinder® assessment for yourself and discover your strengths. You will see just how empowering this knowledge can be. If you would like a plan for implementing strengths or either of the other two keys in this article, connect with me at barbara@acceluspartners.com.

Barbara StewartBarbara Stewart
Coach to financial advisers
Owner and founder
Accelus Partners
Houston, Texas

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The Power of the In-Home Meeting

In my blog, and its companion Journal of Financial Planning article titled, “How to Deliver Empathetic Service and Gain Client Loyalty,” it’s emphasized that a client transforms from a revenue stream to an asset in the presence of loyalty. Each loyal client that tells others of his or her experience with an adviser’s service package represents a vine of fruitful relationships.

The common thought is loyalty begins after the planning and investment solution is executed, service experiences occur, and benefits result. In fact, client loyalty can begin during the sales process.

Bringing Balance to a Fledging Relationship
A relationship has a greater chance of success when there is balance between the two parties. Unfortunately, a wealth management relationship is inherently imbalanced because the prospect is asked to divulge private financial, family and personal details while the adviser is not expected to reciprocate.

The typical meeting in which the prospect sits across a table from the adviser (or worse on the other side of a desk) introduces unnecessary barriers to making the fact-finding process more free flowing. An in-home meeting strips these barriers away.

A Powerful Tandem
An advisory firm’s marketing program reaches a higher ROI by increasing the sales yield from one funnel stage to another. My last blog suggests that during the interest-qualifying stage, the adviser prepares a tailored education presentation (free of charge) for the client’s number one identified need, anxiety, or aspiration. (Note: the recently released FPA/LinkedIn study “Financial Professionals and the Future of Thought Leadership and Social Media” confirms how important education is to clients: 76 percent of respondents rate it “Somewhat Important” to “Critical”.) This allows the prospect to “test drive” the adviser’s services and measurably de-risk the impending relationship decision.

Taking this one step further, conducting this “test drive” in the prospect’s home significantly increases the yield in turning a prospect into a client. This combination sparks client loyalty.

The Real Productivity Measure
An adviser may view an in-home meeting as an inefficient marketing step given the overhead of driving to and from the prospect’s residence. While this meeting takes, say, three times as long to conduct from beginning to end compared to one where the prospect comes to the adviser’s office, this is a misplaced analysis.

The marketing plan’s ROI should be measured on the time it takes a lead entering the funnel to becoming a client. Using this more realistic business measure, an in-home meeting often dramatically decreases the time to a successful close.

Prospects appreciate the increased effort to come to their home and it conveys important messages such as: “I’m valued as a person not just as a business transaction,” and “My needs and anxieties merit this attention.”

Visiting a home is also a treasure trove of information for an adviser:

  • Neighborhood demographics
  • Family lifestyle
  • Family structure
  • Family interactions
  • Hobbies and collections

Keys for Successful In-Home Meetings

  1. Standardize the structure. Formulate a workflow process for conducting the meeting such as a pre-meeting mailing, an agenda, a presentation leave-behind and a checklist of next steps.
  1. Make the offer. For some people, an in-home visit pushes privacy concerns. If there’s reluctance, explain the meeting’s purpose, particularly the decision at hand (for example, “You’re entrusting your wealth and peace of mind to me, and I want you to be as comfortable as possible”). Highlight that it is a standing offer for any future meeting.
  1. Remove the hosting stress. The meeting’s purpose is to provide education on the prospect’s top need or concern and not about creating stress for the meeting itself. Offer to bring refreshments such as coffee plus baked goods if your meeting is in the morning, a light snack if your meeting is in the afternoon, or dessert if your meeting is in the evening.
  1. Meeting precision. Conducting the meeting with precision conveys the value of your prospect’s time. This means being on time, managing to the agenda and having organized materials.

It’s a Relationship!
While financial services is the content, what’s actually being bought and sold is a relationship (see my blog post titled “Your Product is You”). Face-to-face meetings are critical components of due diligence. For the prospect, this involves the adviser’s personal presentation, relatability, trust, care and concern. These core decision criteria come alive when an adviser invests his or her time in a meeting at the prospect’s home.

A prospect contemplates a substantial financial commitment when seeking an investment relationship—for a high-net worth family, this will be thousands of dollars per year. Taking the time to meet in a prospect’s home expresses appreciation for this opportunity and shines light on the adviser’s service role.

Kirk LouryKirk Loury
Wealth Planning Consulting Inc.
Princeton Junction, New Jersey

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Is There a Downside to Setting Goals?

I recently read an article about the downside of setting goals. To me, someone who has always abided by the virtue of goal setting—and, more specifically, the value of setting SMART goals (specific, measureable, attainable, realistic, and time-bounded goals)—this was heresy! What could the downside be?

Resolutions vs. Real Goals
Without these, reaching your goal is likely more luck than anything else. But setting both personal and business goals that are well thought out is something I’ve always preached, as well as subscribed to personally, throughout my own career.

What Could Go Wrong?
So what could be the downside of goal setting? There are a couple of concepts related to goal setting that cause concern.

First, if goals are too absolute, a “failure syndrome” can occur. For example, let’s say I’m not used to exercising, and I set a goal that I want to exercise 40 minutes every day in 2016. But then I only exercise 40 minutes four times a week. Most people would hardly consider that a failure, but it is a failure to meet my exact goal and might discourage me from further efforts for fear of additional failure.

The failure syndrome can be avoided by setting a realistic goal and a separate stretch goal, or by setting a goal range. Using the example above, if I change the goal to say that in 2016 I want to exercise three to seven times per week for 48–52 weeks, I have established a feasible range. Fear of failure becomes less of a reason not to set goals and more of an excuse to avoid seriously thinking about the direction I want to move in and what range of change I seek.

A second downside to goal setting is that goals might incline people to be overly focused on future results at the expense of present-day opportunities along the way. In fact, many people live in the past or the future and miss the whole concept of living in the present. Focusing on a particular goal for the future can blind them to an opportunity right under their nose that might not have existed at the time the goal was set.

To counter that, I would argue that you could either acknowledge that you have set the wrong goal or recognize that there is a new opportunity available. It seems like the logical thing to do is simply to change that goal and move on.

Goals for Business
Business planning starts with envisioning the future and ultimately driving toward those goals that align the present with where you are heading in business. If there is a downside to business goal setting, it might be that goals become like trees in the proverbial forest. If you get too hung up on your goals (trees), it is easy to forget about the vision (the forest). The reality is that you need to be cognizant of both simultaneously to succeed.

Joni Youngwirth_2014 for webJoni Youngwirth
Managing Principal of Practice Management
Commonwealth Financial Network
Waltham, Mass.

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Taking the First Step

As we begin a new year, it’s no surprise that many financial advisers have mapped out the goals they would like to accomplish over the next twelve months. The easy part is knowing what those goals are; the harder aspect is actually planning out the tasks and activities needed to reach those goals. It’s been said that “The journey of thousand miles begins with a single step,” and many advisers have the best intentions as a new year commences, yet many fail to even take that first step in making those goals happen for themselves.

Let’s take a look at what it takes to set up and actually realize your goals by year-end.

  • Set and Clarify Your Goals: Goal setting is a relatively easy to-do but clarifying your goals so that they are quantifiable and measurable is much more difficult. One way to do this is to use the G.R.O.W model, which stands for Goal, Reality, Obstacles (or Options) and Way forward. When you use this model, you will find you are much clearer about what it will take to reach your desired outcomes.
  • Compartmentalize Your Daily Actions: Once you have solidified your goals and written out your G.R.O.W model, it’s time to compartmentalize your daily actions. This will help you determine what your first steps should be. Having just one or two steps to focus on can mean the difference between taking action and just thinking about taking action. Remember, a goal without a plan is a wish.
  • Create Time Horizons: Now it’s time to create a time horizon for your activities. The best way to do this is to literally set your to-do items as appointments in your contact management system. So, if your first action step is to start prospecting, make sure that you set a reminder to do that consistently at the same time each day. When the reminder pops up, set aside what you are doing and be sure to do the task. It is very typical to get distracted and push our tasks aside and tell ourselves we will get to them later. It is also very typical that when we do that, the activity rarely gets completed. So get into the habit of attending to a task once you have it scheduled.
  • Get Leverage to Take Action: Finally, put some “skin in the game” by finding an accountability partner or a person who holds you accountable every day to ensure that action actually takes place. By being accountable to each other, you both are more likely to keep moving forward in the right direction. One way to leverage your success is to assign a reward or punishment to accomplishing or not accomplishing your daily actions.

It’s the Journey not the Destination
Hopefully, by now you’ve realized that taking steps—especially that first one—is merely a process. And by taking each subsequent step, you continue the process. However, it is important to note that if you are only focused on the destination you will miss out on the journey, which is where the learning and growing always occurs.

If you read this blog and need help mapping out your steps to success, email Melissa Denham, director of client servicing at melissa@advisorsolutionsinc.com to schedule a free complimentary 30-minute coaching session with Dan Finley.

Dan FinleyDaniel C. Finley
Advisor Solutions
St. Paul, Minn.

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“SOAP” Notes for Advisers?  

I often hear advisers and their staff talk about the challenge of communicating action items as quickly as possible after review meetings. Doing so allows advisers to get things off their minds before moving on to the next task while staff prepares to follow up on action items.

Often, though, there’s a delay between the time that a client leaves a review meeting and when the notes—whether in verbal or written form—are conveyed. Why? One reason may be that the adviser doesn’t have a consistent, efficient approach for summarizing the meeting.

Lessons from the Medical Profession
Several decades ago, medical professionals started using “SOAP” notes. SOAP stands for subjective, objective, assessment and plan. When everyone making notes in a patient’s chart uses this convention, communication is more efficient—both for those writing the notes and those responsible for following up and implementing plans.

Here’s an example of a fictitious, medically oriented SOAP note:

  • S: 60-year-old female patient presents complaining of a “sore foot for one week.” Patient acknowledges a “trip” on the steps of her house seven days ago. Her gait is obviously impaired.
  • O: Physical exam identified acute point tenderness on the left foot at the head of the third metatarsal and phalanx.
  • A: Suspect fractured metatarsal or phalanx. Temporary splint provided.
  • P: Labs—get uric acid test to rule out gout and CBC to differentiate septic arthritis; get X-ray of L metatarsal and phalanx. Patient advised to immobilize and limit weight bearing till results of X-ray. Call patient with X-ray results.

The notes are consistent, clear and concise, and they quickly communicate to staff what needs to be done next.

Could such an approach be helpful in our industry?

Let’s look at a fictitious financially oriented SOAP note:

  • S: Mary and Sam Jones requested meeting because they “want reassurance that they have sufficient funds to retire in 2017.”
  • O: Clients have $2 million in a 60/40 equity/bond asset allocation in a separately managed account. Risk tolerance has been established at a moderate level. Annual budget of expenditures is $220,000. Clients are 65 and 66 and will start taking Social Security at 66 and 68, respectively. Clients have sufficient LTC insurance and cash balances. Clients state they are healthy and have normal life expectancy.
  • A: Given estimated life expectancy of 84.6 and 86.4, portfolio modeling indicates that clients will outlive savings, assuming normal markets. Discussed their options—spend less, continue working, or address risk tolerance to invest more aggressively.
  • P: Send clients executive summary outlining explanation and options discussed in meeting. Schedule a call with Mary and Sam in two weeks to follow up.

This may not be a perfect approach for you, but it raises the questions:

  • Is your approach to documenting client meetings consistent, clear and concise?
  • Does it quickly and effectively communicate what staff needs to do next?

If the answer to either question is, “No,” you may want to give SOAP notes a try.

Joni Youngwirth_2014 for webJoni Youngwirth
Managing Principal of Practice Management
Commonwealth Financial Network
Waltham, Mass.


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