The Importance of Purposeful Coaching Programs

May 24, 2018


I frequently get calls about coaching programs; people ask who, or what company I recommend. I think my answer is similar to what the callers’ answers are when asked by a prospect about a financial matter: “It depends.” Quickly followed by a question from me, “What are you trying to solve for?” Coaching makes sense only if you understand the real needs of your firm, and can find a coach with a program or style that fits your goal. Just as important, it also depends if you’ve decided to be an enterprise or a lifestyle firm.

The Purposeful Firm

As you may remember, last year we published a paper (co-written with Bob Veres and Raef Lee) called the Purposeful Advisory Firm: Maximize Your Firm by Design, Not by Default.  In it, we compare the tradeoffs between two types of firms:

  1. Industry favorite, the enterprise firm:  The larger, multi-partner, multi-generational firm that lies beyond the founding partner or partners.  One that has professional management and would attract a higher multiple.
  2. A majority of advisors: 63% of advisors in our survey fit are actually more of a lifestyle practice. The firm that provides advisors with a higher current income, possibly a better work/life balance, but may have a lower valuation in the end.

Our paper suggests that there are ways to maximize either approach, but by acting without purpose (which we outlined), the default would be the worst of both worlds – lower income and lower multiples.

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The Importance of Coaching

With that set up in mind, I was pleased to facilitate The Importance of Coaching on Advisors’ Growth during a recent gathering of our clients. The panelists are each president of their firm, and manage over $1 billion combined.  Both have used various programs to grow their practices, and were strong advocates for their respective models. What was unique, however, is they are using coaching to solve for very different things and in very different models.

Advisor A

The first advisor is a single producer with a staff of six. His firm manages over $350MM and uses what I consider to be a plug and play coaching system. This advisor attends three annual meetings and various calls –both one-on-one and group – with his coach. The program provides content and also provides systems and staffing suggestions to support the advisor.  Advisor A says that he works less than before, that his office is more profitable, and he has consistently grown above projections year after year. The program has made him a better advisor who runs a better office.

What I heard from Advisor A is a commitment to follow through. He is all in on the program, though he does sometimes edit some of the content, he incorporates the program into his daily routine.  “If the personal trainer says you need to do 20 pushups and you only do 3, you can’t blame the trainer if you don’t see results,” he explained.  “So I follow what my coach says and the results are there.” I also heard from Advisor A that it’s so important to do your due diligence on style, methods and successes of the coach.  For example:  if you are not an extroverted, client event person and the program pushes that method, it is probably not going to work for you.

Advisor B

The second advisor built a firm with four advisors and manages over $800mm in client assets. His part of the conversation focused on running a business, not a practice. He challenged the more than 100 advisors in attendance to consider and rank:

  • Their vision of their business; it’s uniqueness, and is it shared across the firm
  • Their staff; are the right people in the right seats, do they “get it, want it and have the capacity to do it?”
  • Their access to data; using leading or lagging indicators of successes
  • Their processes; efficient? Organized? Followed by all?
  • Their issues; how are they solved
  • Their traction; is there accountability and discipline to make it happen

If you have read, or heard about, Traction by Gino Wickman, then you know what advisor B is talking about. He is not just trying to be a better advisor (although you could argue that he is), he’s trying to create a more valuable business.

What I heard from Advisor B is a commitment to change the status quo of his firm. To fire himself as an advisor, and hire himself as the CEO or, in Traction terms, as the visionary. I also heard that, while many try this path on their own, having a coach (or implementer) challenges him to think more clearly and objectively about his path.

Financially, is it worth it?

As we were wrapping up, I asked each panelist about cost. While I can assure you there was no collusion, they answered the same. They both suggest you consider coaching  an investment, not a cost. Done right, you have a more profitable business, more income, higher valuation, and maybe more free time. Who wouldn’t invest in something like that?

Purposeful coaching

So should you invest in coaching?  Sure, but only if you are going to follow through. That is why it makes so much sense that you truly understand exactly what you are trying to solve for first. Most of my coaching conversations end with me asking questions that the advisor isn’t prepared to answer. Instead of wondering if you should get a coach start by asking yourself “What is the vision of my firm?” Then find a coaching program on purpose.

Bob Veres is not affiliated with SEI or its subsidiaries.

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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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