It's pure coincidence that an anagram of “team” is “meat,” but the connection still can be twisted into an important lesson regarding high-net-worth advising. Namely, those who get confused about the importance of teams are dead meat, professionally speaking.

Not a day goes by that I am not asked a question about teams, and with good reason. Because a single financial advisor rarely (if ever) possesses the expertise to adequately serve a very wealthy client, building a team of experts and support staff is critical to success in this field, and most advisors know it.

But what exactly makes a successful high-performance advisory team? An independent research project conducted by my firm last year focused on this very issue and arrived at a list of 18 specific factors.

Follow the Leader

In this column, I'd like to discuss the first and most important of the 18 factors: leadership.

Wealth management teams achieve high performance if, and only if, they have an effective team leader. If a team has achieved high performance, you will invariably find a team leader out front, leading by example. If a team has plateaued, you will likely find a team leader who is on cruise control. If a team is in constant conflict, you're apt to have a team leader who either perversely enjoys conflict (they're out there, you know), or studiously avoids conflict. If a team's production is declining rather than growing, you're likely to find a team leader who has checked out and delegated the basic functioning of the team to frustrated or poorly prepared underlings.

Recently I spent a day with a high-performance team, one that attracted $52 million in new high-net-worth assets in 2003. That would be cause for unbridled jubilation, except that the team also watched $31 million walk out the back door over those 12 months. For nine people (five advisors and four support personnel), a net addition of $21 million dollars in a calendar year is simply not going to cut it, and this team knew it.

What was wrong? For starters, the team had no business plan mapping out their final destination and defining who was responsible for what. The senior financial advisor, the team leader by default, was a gifted big-game hunter. When he left the office to prospect, he returned with elephants and hippos in tow. When I asked him what roles the other team members played, he simply said, “They're supposed to be helping service my clients.” The fact that he referred to the clients as “his” was telling. This was a team in name only. The “leader” brought clients in, but lacked the ability to show his team members how to service clients in a way that would make them want to remain with their practice.

This is a common problem, our survey showed. Team leaders tended to view the practice in a much different light than the other team members did. In fact, our research showed a perception gap in eight critical areas.

Here is a short list of things a team leader can do to help his group get on the same page:

  • Have an up-to-date long-range business plan, in writing.

  • Provide a copy of the business plan to very team member, part-timers included.

  • Link annual goals directly to your long-range business plan, and work with each team member to determine how those links affect them.

  • Post annual goals where everyone will see them, and talk about those goals frequently to ensure that everybody is actively working towards achieving them.

  • Make certain that everyone, including the team leader, has clearly defined fixed daily activities linked to annual goals.

Having created a songbook from which the whole choir can sing, so to speak, the team leader can start thinking about his solo.

Writer's BIO:
Matt Oechsli
is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. oechsli.com