PANC 2018: Team Building

At the 2018 PLANADVISER National Conference, the “Team Building” panel explored the various ways a retirement advisory practice can expand. Citing data from Ann Schleck of Fi360, Joseph Lee, senior vice president, head of retirement platforms and strategy at First Eagle Investment Management, LLC, said that only 17% of teams are elite. They get there first by forming, then by storming, norming, and, finally, performing, Lee said.

“Once they get there, they are humming on all cylinders,” he said, noting that elite teams advise 44% of all of the plans in the nation and 92% of the assets. “They have achieved excellence in effectiveness and efficiencies,” Lee said, noting that their average asset under advisement (AUM) per adviser is $1.33 billion and average 25.6 plans per adviser. These teams divide up roles by having some members focused on running the practice and others on selling and business development, he said.

Answering a question from moderator, John Ludwig, a financial adviser with LPL Financial about what roles a practice should first focus on when looking to expand, Eileen Greenspan, senior vice president with Sentinel Benefits & Financial Group, said it is “client-facing positions, We are, after all, in a relationship business,” she said.

In addition, it is important to have a strong “back-office team, including analysts, who can provide incredible support,” she said. From there, “as you grow your team further, add members who can spend time with participants to educate them,” Greenspan said. “That is how we developed our team.”

Ludwig then asked Bill Rice, director of advisor development at Pensionmark Financial Group, LLC, what aspects of a team can be centralized at the home office. Rice agreed with Greenspan that client-interfacing staff are important, and that these can be centralized, along with salespeople. “One way to grow is to bring on additional people yourself,” he said. “Another is to look at affiliation models” like Pensionmark, “or acquisition models. There is no one way to do it, but you do need to think about how you are going to compete with elite organizations, and how other advisers might go after your business,” Rice said.

An adviser could also turn to recordkeepers or defined contribution investment only (DCIO) providers for support, but they could be undone by competing advisers who provide that support on their own for less money, Rice said.

If an adviser goes the route of growing organically, Lee said, they need to hire “the right people.” To find the right people, determine whether or not they can do the job, their motivations and whether they are ambitious to further their careers, and how well they will perform with the rest of the team members, he said. And once a practice hires a new staff member, it needs to groom them to fit into other roles, he said.

As a practice moves from being a sole proprietor, the “adviser has to be ready to get out of their own way,” Rice said. “In order to become elite, you need to hire client-facing staff who can handle enrollments, meetings and day-to-day functions of the plan,” he said.

Sentinel Benefits & Financial Group has had great success hiring new college grads who it grooms to handle meetings with clients, Greenspan said.

Lee agreed that hiring young people is helpful in coming up with new ideas, particularly in serving Millennials. “We need their feedback to tell us what works for them,” he said.

Ludwig then asked how a sole proprietor can make a client comfortable working with other team members. “Assign a dedicated relationship manager to let the client know the handoff from the proprietary adviser is clean,” Rice said. “We also have a call center and drive inquiries there.”

Lee added: “Set the stage early that you are a specialist organization and are hiring the right people to serve them. Introduce them to your staff members a year in advance of the handoff so that they transition over time. Set the right expectations.”

It is also important for retirement advisory practices to differentiate themselves, he continued. “Think about what is next for retirement. Perhaps it is downside protection or retirement income. Help your clients think differently than they are accustomed to,” Lee said.