You have heard it before: “form a team — it will help your business” and “teams make more money.” Bull! Unorganized, poorly managed teams can hurt productivity and your bottom line. Most FA’s take a productivity hit when they form a team and really never get the leverage from the team that they anticipated. Granted most large producers have teams. We, therefore, make the assumption that it is the teaming process that somehow makes them successful. Wrong! They were successful long before they formed their team and would be without a team. They are just more productive with a team because they take advantage of the leverage teams provide. Your average FA does not.
Here is an example: two average FA’s join together and form a team. Their goal is to make their lives more manageable by having a partner that they can trust. They share CA’s, cover for each other during lunch and vacations, and enjoy each others company. No real productivity increase, but they have improved their lives. They still make all their own outgoing calls, set their own appointments, keep their own calender, manage their own portfolios, do their own research, portfolio reviews, asset allocation modeling, profiling, and updating of account information. They do all of their own marketing and sales when they have the time. They rely on their CA to answer phones, solve account problems, and be nice to their clients. This the typical top down authoritarian pyramid model. Nothing happens here unless the FA’s initiate it. When the leaders are on vacation, the team has a chance to catch up from the chaos but no business is initiated. When the vacation is over, the chaos begins again and everyone is once again in the soup. If you studied this case as an MBA student, you would have a few suggestions for management. Our excuse for accepting this model as the norm is that this is how most everyone built their business and they are a successful…so, if it’s not broken…
Studying the best practices of other professional groups, such as dentists and doctors, tell us that there are more productive models. For example, one of the most productive dental practices in the country’s model depends on an administrator to make and confirm appointments and keep the entire staff on schedule. The administrator handles the greeting of patients and management of the practice’s calendar, including setting appointments, confirming, and scheduling follow-up appointments. We call this the Inverted Pyramid Model versus the typical Top Down Pyramid Model. The senior dentist in the practice is at the bottom of the pyramid and waits for orders from the administrator. The dentist is told where to be and at what time. Since the dental hygienist (Relationship Manager) has already prepped the patient and identified obvious issues, the dentist simply shows up, greets the patient, diagnoses any issues, and writes or administers the appropriate prescription for a cure. Prior to leaving the office the patient once again meets with the administrator who resolves billing issues and sets the appropriate appointments. Very simple and very professional. Although the dentist is the head of the practice, the administrator is the brain.
Shall we review our model? The FA calls the client, makes the appointment, confirms the appointment, prepares for the meeting by doing a portfolio review and financial plan update, types up an agenda, meets with the client in the client’s office, writes up a summary of the review and the action steps to follow, follows up on the review and sets a follow-up appointment. He then calls again and again to be sure the client executes everything critical for the client’s success. This is a great model for a new FA with ten clients. This is a disaster for a senior FA’s. Yet this is the model.
The sad thing is how little it takes to turn these inefficient FA’s into a highly productive, creative, team-oriented machines who build client loyalty and grow the practice. What does it take for this kind of a makeover? First, it requires that the FA believes in the New Model and sees the real advantages in remaking his or her business. This new model we call Supernova. Organization is very simple under the Supernova model. Everyone concentrates their energy where they have the most interest and talent. This model encourages people to love what they do for a living and focus on being the best in the world at that job. We have adopted the dentist model in its entirety, less the drilling. We create the administrator’s position from a previous CA who loves this type of work. The FA takes on the role of the Dentist and assumes a leadership role. He or she no longer makes outgoing phone calls to clients since that is now the job of the administrator. The FA is no longer playing phone tag, but instead is doing reviews or meeting new clients in person or on the phone. Each CA is assigned to a book of business. This can be by alphabet or production, but it is critical that a CA have full responsibility for each client relationship. We now refer to the CA as a Relationship Manager (RM). The RMs are responsible for the entire welfare of that client. Although they do not schedule the appointments, they make sure they happen. Since under Supernova each client is contacted each month, the RM is responsible for 100 clients thus producing five reviews and follow-ups per day. With Supernova, each FA has committed to having no more than 100 clients. This gives each FA time to market their practice and gain larger clients. Because we restrict the maintenance time for the team by controlling the number of accounts, we create the opportunity and time for growth.
Next time you go to the dentist for a check-up, pay a little closer attention to their model. It just might bring a brighter smile to your practice.