Tuesday, September 29, 2009

The Changing Role of the Financial Planner




In  Just the Way You Are, Barry White crooned these opening lyrics, "Don't go changing, to try and please me..." (Note: To give due credit to the original composer..."Just the Way You Are" is a Billy Joel tune, written as a birthday gift to his first wife. I just happen to like the Barry White version more.)


This song may come to mind while reading this thought-provoking article in the September issue of the Journal of Financial Planning, entitled, "The Changing Role of the Financial Planner Part 2: Prescriptions for Coaching and Life Planning"

The article stems from a survey of 2000+ CFPs...where it was revealed that 89% of respondents have engaged in some form of non-financial coaching and counseling. In fact, as much as 25% of the planner's job can be devoted to non-financial coaching.

As the article discloses, not all planners embrace this new, and emerging, role. The majority of planners surveyed do see life-planning and coaching as a value-added, and inevitable, service. However, a significant minority find this concept to be abhorrent and inconsistent with their mission...and are wary of the potential ethical and personal complications that might appear when planners tread on the life-planning ground.

The authors conclude that, like-it-or-not, planners will be presented with many more opportunities to assist their clients with non-traditional, non-financial planning. In their view, the planners who embrace this role will "realize the full potential of financial planning." For those that don't, that's OK too. Planners who put up a "firewall" that detaches them from life-planning issues can build good businesses too...that are circumscribed within the boundaries of traditional planning approaches.


by Chris Holman

Tuesday, September 22, 2009

A Day in the Life of a Producing Manager



You come in at 6:45 a.m. You turn on the lights, grab some coffee and begin to consider your day that is coming up.  

Strategy meeting before the market opens – and you will be talking about the wisdom of situational partnering with other advisors, and how this can jumpstart new business momentum.  You anticipate the groans already from the back of the room, where your top FA, LOS 35, always tries to be disruptive while you speak.  

Then it’s off to back-to-back client reviews until lunch, and some quick calls into recruits in the pipeline and some new leads you were given for your own business.  

Lunch – you are scheduled to grab some coffee with a potential recruit from the competition who could be a valuable addition to the office, if only her spouse wasn’t so leery of her leaving her current Firm given the economy….

Afternoon – you get back to the office around 1 pm and spend the next 90 minutes walking around, talking to the Financial Advisors and taking notes as you go:  need to address Sally’s client complaint, Fred is really quiet lately and not himself, and your biggest team in the office seems to showing tension between the senior and junior partners.  

4:30 The Office starts to empty out gradually.  By 7:30, you are still inputting your notes from your client reviews, updating your calendar for tomorrow, and working on your client seminar scheduled for the end of the week.  On the way home, you get a call from one of your Advisors who informs you that he just got an offer from the competition that he can’t refuse….

Sound familiar?

The balance between leading an office and producing is akin to the eternal search for the Holy Grail.  I’ve done scores of training classes around this and heard the best-of-the-best talk about how they try to wear both hats of leadership and producing.  I’m convinced now that there is still not one best way to manage it all.  It takes a leader with extraordinary discipline in organization, follow-through, attention to detail, patience, fantastic communication, great emotional intelligence who “reads others” quickly and accurately, and who has the ability to be equally strategic and tactical as the situation demands.  These traits are easier to write about than to accomplish!

Given my 20+ years of observations of of coaching and training the best-of-the-best, I would like to suggest the following best practice solutions that seem to help Producing Managers keep the balance in perspective:

1) Teaming up with a partner, or partners, especially once your production hits $500,000 or more.  At that point, it gets tougher to manage it all as a sole practitioner.  There simply isn’t enough time in the day to do both roles.  Teams can help offset your workload by allowing you to focus on what you do best, while allocating other roles and responsibilities to other team members.  Flip side: be clear from the start with your team that your leadership role will take time and attention away and they have to be prepared for that.  Most team partners are fine with this as long as you stay accountable for your results and tactical goals that you promised to deliver on.  But some partners over time get resentful if you are spending too much time on your leadership role, so the best bet is to check in often with your team to make sure they are fine with the balance you are trying to keep.


2) Divvy up the administrative and tactical roles with your management team as best as you can.  That is, work with your assistant to be clear on how she can help you with office tasks as well as covering your clients.  Having a strong and organized assistant is a must.  Also, develop a strong relationship with your compliance manager so that they are a true partner in helping you manage risk.

3) Stay organized and on top of your schedule.  A warming to all you “P’s” on the Myers Briggs.  Use Outlook or automated calendars with pop-up reminders to keep you well versed on what is coming up and what you must attend to.  Batch-process activities that beg for repetition and consistency, both in your own practice and in managing the office. Adopt a client service segmentation strategy for your practice that ensures clients don’t get lost in the cracks, and build a process around your new business development strategy so that you are tracking your leads and activities to bring in new business.   Similarly, create process around client reviews, develop a process for reviews for your advisors such as a pre-work sheet/questionnaire for them to fill out prior to their review that helps them prepare for their meeting with you.

4) Get people involved. Build a culture of raving fans that believe in your leadership and who trust you implicitly.  Have frequent strategy meetings.  Do idea-sharing and be the first to offer ideas to others to help grow their business.  Recognize achievement and take the time to really get to know your Advisors – not just their numbers, but what is important to them – their family, their core values, their hobbies.  Consistent reviews and coaching prevents mountains from developing from molehills.  Create a Board of Advisors in the office to guide you on office policy, community involvement and branding, and suggestions to improve the quality of work life (Assistants and Advisors should be invited to join in).

5) Develop a management team. Often there are some advisors who show a spark or interest in leadership early in their career.  Take an interest in them and develop them, and ask them to help you in small ways that create small wins for the office and build their burgeoning leadership skills. They can off-load activities, such as scheduling training programs, coaching new-hire Advisors and screening candidates for hire.
 
6) Time blocking is critical.  Not only are you modeling for the rest of the office, but it is critical to set aside time for your own business.  Many producing managers who are great at both roles have made the decision that while they don’t like to shut their doors, it is essential to have this time for their own business, and others will respect and honor this time if they see you doing it consistently.  Your assistant can also help screen potential emergencies from employees and clients during this time.

You’ve been blessed with strengths in two areas – the passion to lead your clients, and the passion to lead those in your office.  You have a huge task and, no doubt, will work much harder and put in longer work days and evenings than many of your colleagues.  For some of you, this becomes a test-drive for determining if you want to eventually be a full-time leader or Branch Office Manager.  For others, you’ll never want to give up the autonomy of having your own business while having an office to lead.  Either choice is great!  It depends upon what fills up that need inside of you.  By tapping into some of the solutions above, you won’t resolve the daily “Solomon-like” choice of where to attend your focus, but you’ll develop the necessary skills to keep the balance with a semblance of sanity and a great deal of passion.

by Dr. Steve Weiner

Monday, September 21, 2009

Recessionary Clouds and Silver Linings



Since 1955, Fortune magazine has published the Fortune 500, an annual ranking of the top 500 U.S. companies where revenues are publicly available. General Motors was #1 on the list in 1955 (see full list here), along with other names that have since fallen by the wayside e.g. Liebmann Breweries, Pocahontas Fuel, and Cuban-American Sugar. 


Today, as one looks at the Fortune 500, it is interesting to consider that more than 50% of the companies were founded during a recession or a bear market. In a recent study by the Ewing Marion Kauffman Foundation, “The Economic Future Just Happened”, it is revealed that an extraordinary 57% of the current Fortune 500 list of companies began during a recessionary period, or a bear market cycle. 


Additional findings of the study include:
  • Recessions and bear markets do not appear to have a significantly negative impact on the formation and survival of new businesses.
  • Job creation from start-ups is much less volatile and sensitive to downturns than job creation in the overall economy.
The report goes on to explore the reasons why stressful economic times might be fertile periods for the creation of new firms: 
  • Rising unemployment, because it is often concentrated among large and established companies, can free up human capital.
  • An unemployed individual with an entrepreneurial bent, and some measure of experience, may perceive a competitive opportunity to create a new company…as well as thinking there is nothing to lose.
  • Entrepreneurs may target the unemployed as a potential pool of employees.
  • The suppressed financial climate that surrounds a recessionary environment may be less relevant to a start-up company, than a less-new, growing company. 
In "Capitalism, Socialism and Democracy", Austrian economist Joseph Schumpeter coined the term "creative destruction" to describe the process of transformation and innovation...whereby innovative newcomers supplant the corporate behemoths. From the Kauffman study, one can intuit that the next generation of Fortune 500 companies was born during this recession. In 2008 and 2009, about one million new start-ups were founded. Some will fail. Others will shamble about. Many will prosper and flourish. A few hundred will show up on the Inc.500 in a few years, and a smaller number will be among the largest companies in 10-20 years. 

by Chris Holman




Friday, September 18, 2009

"Just Do It!"



Gary Gilmore was a villainous murderer who was executed by a firing squad in Utah in 1977. At the very end, when asked for any last words, he responded, “Let’s do it.”

11 years later, Dan Wieden, co-founder of the ad agency Wieden & Kennedy tweaked Gary Gilmore’s last words into one of most famous ad slogans of all-time, Nike’s “Just Do It.” (The genesis of this ad copy is explored in an acclaimed documentary by Doug Pray, entitled ( “Art & Copy.”)

Inadvertently, procrastinators everywhere have since adopted Gary Gilmore’s final utterance as their call-to-action.
 
Procrastination is the gap between intention and action. All of us procrastinate at times, not all of us are chronic procrastinators however. Not surprisingly, the ranks of procrastinators are growing. 30 years ago, just 5% of the US population was deemed to be procrastinators. Today, the number is closer to 20-25%. (One wonders if the growth of the internet might be a contributing factor. A recent study caluculated that 50% of the time that people are online is actually “procrastination time”.)


If nothing else, the subject of procrastination seems to be an industry all by itself. When one googles “procrastination”, 3.7 million entries pop up. Checking out Amazon.com, one finds 33,879 books on the subject (See here). Apparently, this is a condition that afflicts many of us.

Recent research studies indicate that procrastination might be the outcome of a battle between impulsivness, and the lure of future rewards. This can even be reflected in “The Procrastination Equation” where:

(The-liklihood-that-one-will-procrastinate) = E x V/I x D, where (E) is a person’s expectancy for succeeding at a given task, (V) is the value of a task, (I) is impulsiveness, and (D) is a person’s need for immediate gratification. Got that?

These thoughts, and more, are contained in two good articles in the most recent, Psychology Today.


For financial advisors, the temptation to procrastinate is omnipresent. Two primary enablers to procrastination are: Distraction and Uncertainty, both of whom are frequent guests in the world of the financial advisor. Reducing distractions is a straightforward enough activity, but never very easy. Shutting down email, timeblocking, selectively isolating oneself from extraneous distractions make complete sense (hypothetically) in order to maintain one’s focus. However, how do you respond to one of your best clients who wonders why you haven’t returned their “urgent” email of one hour ago?

As coaches, we have observed that changing the deep-seated patterns like procrastination often require getting to the heart of where these habits reside…which calls for a high-degree of self awareness. Procrastinators who attempt to change old behaviors on a superficial basis, without a readiness to explore and change, are fated towards failure. The good news is that, once recognized, procrastination can be controlled by using the skills of emotional intelligence and self-management.

Stay tuned. This is a topic that we will explore again. In the meantime, if you have thoughts, resources, books, etc. that have helped you slay the procrastination beast, please share them with us.



“Even if you’re on the right track, you’ll get run over if you just sit there.”…Will Rogers

By Chris Holman

Thursday, September 3, 2009

True Grit!





Grit…Perseverance…Tenacity…Determination…Stick-to-itiveness!

Good article in the Boston Globe discusses how new scientific techniques are being developed to measure “grit” in individuals. One of the initial findings of the studies is that grit can be a better marker of future success than standard measures of intelligence, e.g. IQ.

http://www.boston.com/bostonglobe/ideas/articles/2009/08/02/the_truth_about_grit?mode=PF

One of the academic pioneers in the study of Grit is Angela Duckworth, a psychologist at the University of Pennsylvania. She says, “I first got interested in the study of grit after watching how my friends fared after college (Harvard). Those who were less successful were often just as smart and talented, but were constantly changing plans and trying something new. They never stuck with anything long enough to get really good at it.”

By the way, if you are so inclined, you should take Dr. Duckworth’s Grit Study…an assessment tool that evaluates where one falls on the grit spectrum.

http://www.sas.upenn.edu/~duckwort/images/17-item%20Grit%20and%20Ambition.040709.pdf

One of the interesting, and obvious, questions is…can “grit” be learned? Dr. Duckworth seems to think it can be. She refers to individuals having “fixed” and “growth” mindsets. Growth mindsets consider the possibilities, while fixed mindsets consider the limitations.

Not surprisingly, Dr. Duckworth’s observations parallel much of what we see at ClientWise within our coaching engagements. Those advisors who pursue their goals with focus and intention, and are able to open themselves to a bigger vision…are bound for success. In the words of William Feather, “Success seems to be largely a matter of hanging on after others have let go.”

By Chris Holman

Tuesday, September 1, 2009

Baby Boomer Entrepreneurs



In a fascinating new study by the Ewing Marion Kauffman Foundation, it was revealed that the Baby Boomer Generation, age’s 55-64 year-olds, had the highest rate of entrepreneurial activity of all generations.

Interestingly, Mark Zuckerberg’s Facebook generation, the 20-34 year-old types, was the least active in creating new startups. Go Boomers!

The reason for the Baby-Boomers’ entrepreneurial zeal is not surprising. They are living longer and healthier lives, and are not choosing the gold-watch-at-retirement-hit-the-golf-course path. Instead, they are leveraging their experience, skills, contacts, and other resources in order to pursuer their second, third, or more, careers.

For financial advisors with Boomer entrepreneurial clients, this trend has very interesting implications. Most importantly, how can financial advisors build comprehensive wealth advisor practices (and trusted advisor networks) that support their go-getter clients?

For example, to the extent that the advisor has assembled a healthy, diverse Trusted Advisor network of their own; they should actively make offer up introductions within this network. Additionally, as the Boomer entrepreneurs assembles their own network as they build out their new company, the advisor should be all over that too.

http://www.kauffman.org/uploadedFiles/the-coming-entrepreneurial-boom.pdf

Authored By Chris Holman