The compliance burden borne by branch managers has intensified. Here's how to make the best of it.
How can you be a cop and a coach at the same time?
That's the challenge facing many branch managers these days. Sure, as a branch manager you have to juggle so many balls at once, it's a wonder you don't collapse: manage the branch day-to-day, make sure the technology is up and running, recruit, and in many cases, produce. But there's one balancing act that's particularly tricky: supervising compliance on the one hand and being a coach, on the other.
For one thing, they're almost contradictory roles. “Branch managers are working for the firm on the one hand, making sure all the i's are dotted. But they're acting as advocates for advisors at the same time,” says Stewart Lee, a former branch office manager who heads Lee Training, a consulting and practice management firm in Wellston, Okla.
Plus, in these days of stepped-up scrutiny, compliance can be so time-consuming, it leaves little leeway for adequate coaching. And there's another thing. “The jobs require very different skill sets. And only a minority of managers are able to do both well,” says Barbara Herman, an executive recruiter with recruiting firm Diamond Consultants in Chester, NJ.
Of course, both responsibilities are also crucial to the job. Coaching is about far more than just, say, showing an inexperienced advisor the ropes. Ultimately, it's essential to sales growth — that is, to accelerating how much your branch is producing and improving your standing with the home office. “Branch managers are very conscious of where the office is in the pecking order of the organization,” says Lee. It's also about retention, since the relationship with a branch manager is perhaps the most important ingredient in an advisor's decision to remain with a firm. As for compliance, it defines a branch manager's primary responsibilities — to act in a fiduciary role in charge of clients' assets, as well as to keep the regulators at bay.
The stakes are especially high now. For one thing, both novice and veteran advisors need more support now than perhaps ever before. At the same time, compliance issues are likely to become even more burdensome when new regulations are finalized. Also, home office scrutiny of branch managers has intensified. “There's a higher level of accountability now. The expectations are very high and there's little margin for error,” says Herman. According to Herman, branch manager terminations are on the rise. While that's often due to restructuring, compliance transgressions on the part of advisors also play a part. “Not a week has gone by over this year that I haven't had news of a highly regarded manager being terminated,” says Herman, “And compliance issues have often played a role.”
For branch managers in complexing arrangements, the compliance burdens — and the tensions — are often diminished. But there are a few things you can do whether your office is part of a complex or not. A lot of it comes down to how you approach your compliance duties. If your attitude toward compliance is to see it as a punishment, your advisors will get that message too. On the other hand, establish that the point is helping to run the practice more productively and you'll find the going easier.
Preventive action will also help you to ruffle as few feathers as possible in your role as compliance cop. That means discussing compliance issues on a regular basis, making sure advisors stay on top of the latest bulletins. Then, there's delegation. That means finding a strong sales manager who can lift some of the burden off your shoulders. Take Daryl Stong, who founded Harborview Investments in Portland, Maine, in 2002, and juggled compliance and coaching duties as branch manager for many years. Two years ago he and his partners brought on board an advisor with experience as a sales manager at a wirehouse. Not long after, Stong decided to make the advisor a sales manager and hand most of his coaching duties over to him.
Still, you can't give it up entirely. Stong continues to work with advisors on marketing issues. “Branch managers should have high visibility among their advisors,” says Herman.