Do Wealth Managers Get What They Pay for When they Hire Themselves?

Aug 23, 2011

In a recent VIP Edge Member Client Experience Survey, “Wealth Managers” listed their greatest hurdles to achieving revenue growth goals in 2011. Of course, limited new client acquisition (40%) led the way, but what really surprised me was that they listed lack of quality talent (28%) as the second biggest obstacle in their way.  Basically, what the wealth managers were saying is that their firm was not up to the challenge for growth. They didn’t have the talent to compete.

Are you hiring yourself?

Over the years, I have been in thousands of advisors offices.  Typically, I see firms that are run and staffed in the unique mold of the lead advisor.  In other words, the advisor does the hiring by bringing in people just like them instead of rounding out the firm’s depth of knowledge and capabilities. The firm is built on the core strengths of the advisor and everyone in the office share those strengths. That model is great if you want to hang out talking about the markets or sports, but presents a challenge when you need a multi-disciplined approach to a problem, like not meeting your growth goals.

If you haven’t taken a hard look at your own performance, you don’t have much of a gauge to measure candidates who complement you and bring your firm to the next level.

This is what makes a firm typical versus a standout, a firm that runs like a “practice” versus one that runs like a business. No wonder those wealth mangers lack quality talent. Hopefully this does not sound familiar to you. But if it does….

The case study profiled in VIP discussed ways for advisors to prioritize their key competencies and target training.  Below are 4 steps to get firms on the right path.

1. Develop a plan for prioritizing your key competencies. First, take a hard look at your firm’s core competencies, then evaluate the expectations of your client, your partners and your shareholders and develop a plan, This plan should be based on your competencies and needs to target client and shareholder expectations. Then, find a way to rate what makes your actions as an advisor good, better and best; or as the case study defined it, “base”, “intermediate” and “mastery” level performance.

2. Evaluate your performance based on that rating. Using the framework you created, assess your firm’s performance based on your ratings. For this assessment, consider both the tangible outcomes and any observations you had over the evaluation period.  Remember; take a very critical “ugly” look at your firm.

3. Identify target areas for improvement. Based on your assessment, develop a 3-6 month plan for improving areas where you are not performing your best. Create a plan for yourself, as well as any advisors you work with. Recommend specific activities that will allow you to develop your business in key areas.

4. Reassess. As expectations change, so should your plan. Every six months take some time to go back and evaluate your plan. Ask yourself, have my clients expectations changed? Have I even asked my clients if their expectations have changed? Make any necessary adjustments and continue to evaluate yourself and your partners based on this framework.

Now is a great time to take a hard look at your firm’s performance so that you can ensure that you are the best you can be.

John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

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