If you are an IFA, you are your firm's biggest and most valuable resource. You can also quickly become your firm's biggest growth bottleneck. For any IFA who has articulated a vision of a 10x business growth in the next 10 years - and there is really no reason why you should aim for anything less - there is no way you will achieve this aspiration if you cannot build, motivate and retain a high quality team. You may be a high quality advisor today, but to grow, you will need to transition from being a good advisor to becoming a smart manager who grooms many advisors. For many advisors, this is the trickiest problem. Some are simply unable to delegate and empower, others are unwilling to trust anybody else, others fear that team members will take clients and walk away and some others do all the hard work but lose trained talent to competition due to their inability to retain quality talent. A couple of bad experiences in tea building and you are perhaps ready to throw in the towel and decide that you are better off without a team. Give up on big growth aspirations - at least you have peace of mind and control on your business.
That's a call that each IFA needs to take - especially now that we are entering a new business cycle which promises substantial growth in the years ahead. Do you want to maintain status quo, remain a single person advisory outfit and grow your business to the limits of your personal capacity? Or do you want to Think BIG and take the plunge with attempting to build a high quality team - and retain it? If you are in the Think BIG frame of mind right now, here is a ten step process that you can consider implementing, which should put you on the path to building, motivating and retaining a team that can help you meet your growth aspirations.
10 step process to build high quality teams
1. Recruit correctly
Spend enough time on ensuring you recruit the right kind of people for the jobs available at your firm. When recruiting for a small firm, it often may not be wise to set a target to complete the recruitment process within a couple of weeks. Sometimes, you need to go through numerous candidates over a few months, before you identify the person who you think is the best cultural fit for your firm. When recruiting, it makes sense to give lot more weightage to attitude than skill. Skill can be developed through training - attitude is a lot more difficult to imbibe. A new member is either are a good cultural fit or is not. It would be a good idea for you to write down what specific character traits you are looking for in any individual who will join your firm. Making this list will give you clarity in directing questions and obtaining evidence from candidates during the interview process, to enable you to get a sense of whether this person is a good fit or not.
Before calling any candidate for any interview, ensure that you have a good 2 minute pitch about why a good candidate should join your firm. After all, just as you are taking a risk with the individual, so is he or she with your firm. Ensure that your 2 minute pitch describes the vision of your company and how exciting and rewarding a journey it is going to be for the new recruit to get on to this growth story. If you want good talent to come into a firm that is not among the biggest brands in the business, YOU need to be the magnet that draws high quality people in. YOU need to be the person newcomers will trust to give them a fulfilling career. Ensure that you transmit your passion for your business and its growth plans onto people you want to hire.
2. Create a learning environment
Financial advisory is a knowledge oriented profession. Young people in this profession with the right attitude would like to learn in their early professional years and only then seek to capitalize on this learning in subsequent years through various means - promotions, more money, more responsibilities etc. This is not like a grocery supermarket where a youngster learns in 1 week how to do billing at the cash counter, and that then is pretty much the end of his learning and the beginning of his quest for the best pay for his limited skills. Becoming a financial advisor requires a lot more than a couple of mandatory certifications - it needs loads of practical on-the-job training. Doctors and chartered accountants for example have large doses of practical training included in their course curriculum. This is not the case for financial advisors - which is unfortunate.
This however is an opportunity for growth oriented IFAs who want to build quality teams. Since it is not the norm, you stand a great chance of attracting high quality youngsters if you make the effort to create a learning environment in your firm. A simple way to do this is to ensure that there is something new each week for your team to learn. Many IFAs who are successfully building teams have for example dedicated 2-3 hours every Saturday for conducting learning sessions for their teams. Team members can be encouraged to research a topic and present to others in these sessions. Outside experts can be requested to give talks on their areas of expertise. You as the leader of the team, can take the lead by presenting at least 1 session every month, on a subject where you have expertise and experience. Taking the time and effort to consciously create a learning environment in your firm will be a great way of spreading word of mouth among existing team members and prospects that your's is a firm where they can hope to learn.
3. Train your staff with diligence
Make the effort to personally train each new member of your team. You know best what you want out of a new member, you know best how things ought to be done in your firm. That being the case, ensure that you devote sufficient time in the initial months to personally train each new member. If you have hired a new advisory person, ensure that he / she gets the benefit of accompanying you on all your client meetings for 3 months, ensure that he / she sits down with you and sees you deciding on portfolio strategy for each client and make an attempt to explain to them the rationale for your portfolio recommendations. Think of how a surgeon is surrounded by interns when performing a surgery. The surgeon does his job, all the time explaining to the interns his analysis of the situation and the rationale for his on-the-spot decisions. You are that surgeon and each client portfolio that you review is a case study for your new recruits.
4. Define each job clearly
Before giving a new recruit "live" responsibilities, ensure that you have clearly defined the job and that you have clearly spelt out expectations and outcomes. Once the training period is over for a new advisor, hand over a set of clients for him to manage - preferably at least some where he has seen you doing reviews and meeting clients. It is unreasonable and demotivating to ask new recruits to go out in the market and build their book from scratch. By giving them a book to manage, you are building their confidence, which will only help them in their acquisition objectives.
Have you clearly defined which clients your new team member is independently responsible for? Does he know which clients he plays a supporting role to you for? Does he know how his performance is going to be measured? Will his performance have adequate weightage to managing existing clients as well as sourcing new business? Does he have a clear process provided for lead generation and follow up? Does he have a weekly activity schedule given to him and a requirement for submitting to you a weekly execution status on these activities? Are you holding him responsible for activities and following due process or only for outcome? Every new recruit will benefit immensely from knowing exactly what is required from him and how his performance is going to be measured by you.
5. Supervise appropriately
In the initial period, your new recruit will benefit from close supervision and a gentle guiding hand, correcting him where he is going wrong and teaching him what he doesn't fully comprehend. Over time, your role as a supervisor needs to subtly change - as too much of close supervision for somebody who has understood the ropes, will be perceived as breathing down the neck. People need guidance initially and then yearn for independence. You will need to play the fine balancing act to supervise to the level required by the firm to maintain its quality standards and yet give space to each individual to perform within broad parameters. Creating strong MI systems with weekly activity reporting is a good way of giving space yet maintaining control.
6. Lead by example
No leader can realistically expect a team to follow certain principles which the leader himself is not committed to. If you expect all your advisory staff to conduct quarterly portfolio reviews and meet clients at a pre-defined frequency, are you doing likewise for clients managed by you? If you expect activity reports to be filed every Saturday, are you doing this yourself? If you expect every advisor to conduct one learning session at least once in 2 months, are you conducting a session once a month yourself? If you expect your advisors to recommend only funds approved by your research process, do you also always do likewise? In short, whatever are the processes you expect your team to follow, are you leading by example?
7. Motivate
There are many ways to motivate your team, and numerous books have been written on this subject. Some common ways to motivate include :
Public recognition : Patting a team member on the back in private is half as effective as calling for an all staff meeting and recognizing the individual in public. Put up a poster on your office notice board recognizing the team member of the month. Let all the AMC sales people who visit your office also know who is the star of the month and what was his achievement. Involve the family : Small businesses have a distinct advantage of creating a genuinely family atmosphere. Get the families of your staff fully engaged in the progress of your firm. Get the families to know each other. Build strong bonds. Celebrate your team member's success with his family. Acknowledging a team member in front of his family will motivate him far more than some more money can. Handwritten note : Give out a handwritten, signed note acknowledging excellence, and ensure your note is specific about what you are patting him on the back for. You will be surprised how long a team member will treasure this hand written note versus how soon an email praise from you will be deleted along with his quarterly bulk email delete activity. Make him a coach in his area of excellence : If a team member has achieved excellence in one aspect of your business, make him the official coach for other team members on that aspect. This will hugely empower and motivate the person who took the pains of achieving excellence.
8. Empower
Once a team member becomes proficient in his area of work, his aspirations will start growing. Apart from the monetary aspect, one key aspiration will be empowerment - the ability to gain more control on one aspect of business, the chance to lead a team. You will need to keep reviewing your team to see who needs close supervision, who has graduated from the need for supervision to the need for space and who has gone beyond the need for space to the need for growth. Your firm - being smaller than large banks and wealth management firms - should have the flexibility and nimbleness to provide growth opportunities for those who deserve it - faster than a large organization would normally provide. That is what will make good talent stay with you, after the initial learning phase is over. Its not always only about money.
9. Share in profits
There will be a handful of team members who you will want to retain throughout your growth journey. There will come a point in time where, for these individuals, you will have to go beyond a variable pay that rewards them for their individual contribution, to a share in profits of the firm - which gives them a feeling of participating in the overall growth of the firm and not just getting rewarded for their own efforts. Share in profits is not a stake in the firm - it means giving a percentage of annual profits to these key members in addition to their own compensation. That's something that no large firm can give to advisors - and that's a hook that can keep key employees within your fold.
10. Stake in the firm
A smaller set of key employees will then need to be given the final retention piece - a stake in the firm itself. Many advisors find this most difficult to do. But, the way to perhaps look at it is that if by giving up a slice of the pie, you are able to grow the pie manifold, everyone is a winner in the bargain. Here again, the key to note is that no bank or big institutional player would give a stake to a senior player. You are not only growing the pie but also retaining quality talent by offering them something that most large players cannot.
Content is created by Wealth Forum and must not be construed as an opinion by Reliance Mutual Fund.
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