DETROIT — “I love your book on Elite Teams; in fact I use it to help me lead my team,” Gerry exclaimed rather enthusiastically, and then asked, “What is your latest research saying about Elite Teams?”
With those words of praise, Gerry had my full attention. Little did he know that I’d been pouring over the data we’d compiled from our latest research project on wealth management teams. I shared some findings that were most top-of-mind, and then promised to send him a link to the Elite Teams Assessment we were developing. Before we parted, I returned the compliment, explaining to Gerry how he represents the primary ingredient of every Elite Team—good leadership—and how it was refreshing to listen to him talk about his team’s continual quest to improve.
The Oechsli Institute has been researching teams from all aspects of the financial services industry—wirehouses, independents, RIAs, financial planners, insurance agents—for nearly two decades. What has been a consistent theme, personified by Gerry, is that regardless of their origin, a small subset of wealth management teams always lead the field, and do so by a wide margin as illustrated below:
Elite Non-Elite
- Team New Assets $30,416,667 $11,084,489
- New Assets per FA $19,843,056 $4,951,369
- New Clients per FA 22.9 14.2
- Clients Lost 1.44 3.80
We refer to these teams as elite because they are. The gaps in these critical business metrics are significant. As you can see, elite teams are bringing in nearly three times more new assets than non-elite teams. And from an individual standpoint, financial advisors on elite teams are acquiring four times the new assets than advisors on non-elite teams.
What’s amusing is how we keep hearing questions along the lines of “what the financial advisor of the future will look like” when this “advisor of the future” has been in our midst for years—in the form of today’s “elite.”
I’m going to take away a bit of the mystery enshrouding elite teams by sharing insights from one of the 15 areas of team functionality (elite teams rank higher in all areas) we studied: business planning. Let’s take a quick look.
Business Planning
This area of team functioning has one of the largest performance gaps (1.41). It appears that non-elite teams don’t spend as much time planning, whereas elite teams are much better at planning for the long term. And this type of business planning is typically accompanied with clearly defined annual goals (metrics) that serve as stepping stones to the long-range plan.
For instance, if the long-range plan for your wealth management team is to serve as a family office for the affluent in your community, your business planning might involve:
- AUM
- Revenue
- Number of affluent households
- Profile of team’s typical affluent household
- Scope of wealth management services provided
- Structure of wealth management team (team members)
- Referral alliance partners
- Succession plan
Your annual goals are essential steps towards making your business planning a reality. For instance, if your team’s long-range plan involved the aforementioned, this year your team might need to:
- Acquire a certain number of affluent households
- Bring in a specific amount of new assets
- Generate a specific revenue total
- Jettison a certain number of smaller clients
- Create an updated financial plan for a specific number of clients
- Review the insurance policies for a specific number of clients
- Onboard a junior advisor
- Develop one new referral alliance partner
The concept is basic: Your team’s annual goals are stepping stones directly linked to your team’s long-range business planning.
Fine-tuning any area of team functionality is work that requires attention to detail and oversight. The concept of “inspect what you expect” is vital to improving a team’s performance. That’s the secret of every elite team.
It’s a leadership issue. Gerry understands this, which is why I’m confident that after completing the Elite Team Assessment (gap analysis), he’ll select one or two areas of team functionality to fine-tune. And yes, I’d bet the house he knows the secret and will inspect what he expects.
Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. www.oechsli.com
