Better Together

“No one can whistle a symphony. It takes a whole orchestra to play it.” Although Yale professor H.E. Luccock said this more than 50 years ago, it still rings true.

No one person can do it all, especially in this global, 24/7 economy. Team building is not the latest management trend, but a reality that all hands are needed on deck, if the ship is expected to move full steam ahead, instead of going adrift at sea or, worse, sinking. For plan advisers deciding not to go it alone, the ideal team can be the key to a successful business. The right mix is undeniably a competitive advantage. A mismatch can cost you clients and valuable team members. It is no wonder then that plan advisers are treating the team-building process like the care and feeding of a newborn.

The question, though, is what should come into play when building your “dream team”?

First Things First 

Look first at your business model. What are you offering clients—investment guidance, plan design, or employee education, for example? What do you have already in house, what do you need to hire staff for, and what will be outsourced to others? Your service model determines the skill sets and talent required of your team members.

Secondly, what is your budget for this team? Can you afford to hire those people necessary to ensure you have all the skill sets to deliver for clients?

When it goes to hiring, there are several key considerations. David Altimont, retirement practice leader with Lockton Investment Advisors in Dallas, points out a few of his criteria: “Every team member must have a customer-focused attitude, industry knowledge, and add value. ­Everyone should have exceptional verbal and writing skills. There should be a complementary mix of skills among members, and everyone has to buy into the greater team concept.”

Furthermore, explains Vincent Morris, Vice President, Bukaty Companies in Leawood, Kansas, the team has to have the moxie to meet the growing needs of clients. “The team should be able to assist with all aspects of the 401(k) for the plan sponsor, be it investment advisory, participant education, implemen­tation, payroll integration, census collection, reviewing 5500s, provider oversight, fiduciary expertise, participant advice, and plan-level advice. One person can’t do it all.”

There are many variations on the theme, but Morris says it is typical for advisers who specialize in retirement plans to hire a client service person to handle the daily plan-related service items. Many retirement plan teams also are adding wealth management producers to help support participant servicing and rollover opportunities. It all goes back to understanding your service model and client deliverables.

“We have to take these positions a step further,” says ­Morris. “Our client service person is supported by a compliance expert to help with plan document issues, corrective filings, testing issues, and 5500 issues. We have a dedicated person to research investments and prepare investment lineups and do fee analysis,” he adds. The firm also has someone dedicated to conversions and implementations. These roles each specialize in one area of the firm’s 401(k) business, thus allowing for greater depth of knowledge in each area and greater resources.

“We have broken duties and responsibilities out in this way so we can build scale and better efficiencies in bringing clients on board and then servicing them,” says Morris.

As management guru Ken Blanchard said, “None of us is as smart as all of us.”

Pick winners 

“Teamwork divides the task and multiplies the success”: The author of that quote is unknown, but it speaks to the heart of the team, how to divide and segment duties so that clients receive the best service.

Who should be on the team is entirely dependent on the size of the team and range of services. Smaller teams generally benefit by focusing on the three core practice management components: marketing/sales; service, and operations/compliance, says Michael Brown, Partner, retirement plan consultant with Clearpoint Financial in Seattle. As the team expands beyond mastering the basics, then wealth management, insurance, and specialized services can be incorporated, if so desired.

Certainly, you want the best and the brightest but it is not as simple as that. “You don’t want to get caught up and be overly impressed by credentials. Credentials don’t mean a person knows what he is doing. There’s a lot to be said for the person who can do the work,” says William Beale, Manager, Henderson Brothers Retirement Plan Service in Pittsburgh.

“Potentially, the biggest issue is fit and personality. That’s the glue that holds the team together,” he adds. However, to know if someone is a good fit, you have to be honest about who you are as a company, to know what your culture is and is not. “When you have this figured out, the art of team building is a little easier; you’re more likely to get it right,” Beale adds.

“I suggest that it’s equally important to determine who shouldn’t be on the team. Taking the extra time up front to perform some basic strengths and personality profiling often alleviates a lot of brain damage later,” Brown agrees.

“Anyone who’s worked within a deeply troubled team environment likely will agree that personality misfits are not ­intangible; more often, they become the unspoken but very real elephant in the room,” says Brown. While tangible experience counts, so does being able to “play well with ­others,” and intangibles like buying into the company’s mission, ­having the spirit of team first, individual second, and a strong work ethic. Such factors are so important that Ryan Gardner, Principal with Fiduciary Investment Advisors in Windsor, Connecticut, says his firm does personality testing of potential new hires to get a sense of who they are. Candidates go through a series of interviews with partners and consultants. “We compare notes, listen, and decide who’s best for the firm and our clients,” he adds.

Much also depends on the gap you are trying to fill. “Someone may not have great technical skills, but may be a relationship builder and great at client facing so, depending on what you need, that may be the person for that spot,” says Paul D’Aiutolo, an ERISA consultant with UBS in Rochester, New York.

The point is, think outside the box. The perfect team member may not come gift-wrapped. Beale says, even if someone has clients and assets to bring with him, that is not always so important. However, advisers should know whether they have time for hand-holding and training or whether they need someone to step up right away. “It’s nice when they can bring assets, but what is the quality of the business? Do they have a non-compete? Will that business follow them? If they have $100 million of garbage, that doesn’t do us any good.”

John Cate, Senior Vice President at Morgan Stanley Smith Barney in Indianapolis, goes a step further. “If they’re ­bringing assets, I wonder why perhaps they failed elsewhere?”

Frankly, says Morris, “We hire more for talent and ­ambition. A quarterback will need different skills than the offensive line that protects him. We believe skills can be learned and taught and believe all team members should seek to achieve credentials, designations, and to be recognized by their respective industry groups and peers.”

Retain top talent 

It’s hard enough to build a stellar team, and harder still to keep it together. What can go wrong? For starters, everyone must contribute equally, no matter their role. “If someone is always pinch hitting for someone else, to the point it’s abusive, that can pollute the team,” says Beale. The team is only as strong as its weakest link, adds Morris.

What also can pose a problem is when skills overlap. “You have to figure out who is responsible for which pieces and it needs to be clear to the client who is responsible for what, initially and ongoing,” points out Altimont. He recalls times when the team has been in a meeting with a client and, when the client asked a question, there was a pause because no one was sure who should answer the question. “That can create channel confusion. We got past this by meeting ahead of the client meeting and, because clients are different, we build teams accordingly,” says Altimont, meaning one team member may fill slightly different roles based on a partic­ular client’s personality or needs, for example. The firm also builds charts and diagrams for clients showing them what each person’s role will be.

However, perhaps nothing spoils the bunch like a big head—ego. It’s no secret that the investment and advisory business is filled with its share of egos, says Brown. Teams regularly fail or split up when large differences exist in the perceived value of key partners. “Someone must do the hunting, while others do the cooking. Vary those roles too much and team members may experience difficulty assigning accountability,” he adds.

Simply put: “When someone has an unjustified elevated perception of self, it can be an issue,” says D’Aiutolo, who has bumped up against a few egos and let some go. “If you think you’re me, go be me somewhere else; build your own team,” he adds.

What else can kill team spirit? People thinking they are underpaid, and keeping score. “I’ve seen teams fall apart because they were keeping score—who brought in which assets and how much revenue. We don’t keep score. We are all working toward the good of the team,” says Cate.

Manage for success 

The team will be only as strong as the coach. You can have the perfect team but, without proper management, it can be destined for failure. What are some proven management strategies? Let everybody stretch to do the highest-level work they can. There must be room to grow. “When you ­provide professional development, you get paid back in spades,” says Cate, who knows about growing a team. Six years ago, his team had $60 million in assets and $600,000 in production; today, it’s $950 million in assets and they likely will cross $4 million in production. “You have to allow junior partners to spread their wings, to do what they do best, without clipping their wings,” adds Cate.

Communication is key. “People have to feel like they can speak freely and bring ideas. There can’t be any fear in the room. Some of the ideas should turn into reality. If people feel they can have an impact, it feeds on itself,” says Beale, who meets for an hour with each team member monthly to discuss projects and resolve any issues, such as a workload deemed as unfairly heavy.

Talk and talk often. “You have to meet frequently, put issues on the table, share views, welcome differing views. Talk so that, ultimately, everyone is on the same page,” says Gardner. Goals must be clear. “People on the team have to know what we’re trying to do for the clients and share the mission,” says D’Aiutolo. Better still if the goals are realistic. There’s nothing like victory to bring more success.

Money matters, too. “There should be incentive compensation based on an individual’s role within the team, as well as incentive compensation for the team as a whole,” suggests Morris.

The best coach also knows how to say thank you. “I will take a junior person and his wife along with me and my wife on a trip centered around a conference. We work and get to know each other better and our wives get their spa treatment,” says Cate. Time together outside the office, be it picnics, lunches, informal or formal, is critical. Fun must be somewhere in the equation.

Rewarding success publicly and acknowledging the contributions of all team members goes a long way toward keeping a winning team winning. Says Gardner, “Everyone must feel like an important part of the team, no matter what their role. Nothing can be seen as menial. All have to feel like they are making a contribution and be recognized for it.”

A united, focused team dedicated to the client is a secret­ weapon. D’Aiutolo boils down his 17 years of wisdom, “­Organizations that get it right, have the right people in place, provide the best services for clients. This is a people business.”   

-Sheryl Nance Nash 

Offering Assistance 

For advisers analyzing whether or not to grow their teams, broker/dealers and custodians often can provide some guidance.

For example, a Fidelity program introduced in September, “Expand Your Practice,” is intended to help registered investment advisers (RIAs) analyze their readiness to grow through mergers, acquisitions, or hiring new people. This program is in addition to RIA Match, a program designed to match brokers looking to become RIAs with a list of firms that would suit their needs. The program offers materials in three parts: “Your Guide to Expansion” and “Expanding Your Practice—Are You Ready?” white papers, and Expanding Your Practice Webinars.

Also offering some insight is a study from Pershing Advisor Solutions LLC, a BNY Mellon company, “Creating Growth: Tuck Ins, Breakaways, and Advisor Recruiting Strategies.” The proprietary and third-party research report offers guidance on how to develop a recruiting strategy and effectively on board and integrate advisers into a practice. Pershing said the report addresses four areas: Determining What’s Right for Your Firm, Developing a Recruiting Program, Determining Appropriate Compensation Models, and Onboarding and Integrating Advisers. —PA