The Top 10 Team Building Mistakes Financial Advisors Make

Years ago, I had an amazing epiphany about financial advisors and the essence of team building in wealth management, “No financial advisor makes it to high seven figures without a team.”

And further, “A financial advisor and one assistant don’t make a team. The minimum team size is financial advisor, assistant, and part-time computer operator.”

This was back in 1989.

I was the first to come out and say: “Partnerships are a good thing. They benefit both clients and advisors.”

Both of those insights were true way back then.

They are true today with this exception: The original 2½ person team will take you to about a million and a half today. I have taught these principles so much over the decades that the industry has caught on.

Most financial advisors know they need a team. However, many make mistakes as they jump into building out a team.

I have been involved in at least 5,000 teams, some of which have been featured in Forbes. The ten biggest mistakes cited here are, in my experience, the most common mistakes and the most deadly.

Mistake #1: Speed Hiring – How the Rushed Decision is Just Plain Bad

You have seen speed dating take place in a movie or two. The idea is you will meet lots of different people for a brief time. From those meetings, you will decide to go out on a full date with one or more of them. While that might be a good way to get to know lots of people at once, that is not the purpose of the hiring process.

So, why do so many follow that same method? They meet with lots of candidates for a few minutes and hire the one they like the most.

You are looking for someone who can fit in with your team, thrive in the job, and stick around for the long haul. Finding that person will take time and a lot of patience.

That’s why I’ve always said to hire the best person for the job, not the best candidate who applied. Careful selection is key to avoid them being a poor fit in the long run.

It’s also why I say to always be hiring. You will meet lots of people in this industry and even many outside of the industry.

Keep tabs on those you think have the work ethic and right personality to fit with your team. Stay in communication with them through phone calls, texts, or even LinkedIn. Over time, you may find that some of those people were just great actors and they don’t have what it takes. Some will impress you further. When you are ready to hire, start by interviewing the latter group.

Remember, understanding of regulations like those enforced by FINRA and the right professional designations should factor into the hiring process, ensuring the financial situation of your firm is in good hands.

Mistake #2: Undefined Roles – The Chaos of Not Knowing Who’s Who

There is a huge difference between a collective of individuals merely performing tasks and a synergized wealth management team.

Think about a baseball team. When it’s time to pitch the ball, the team members know to throw it to the pitcher. You wouldn’t expect the catcher to toss the ball to the shortstop for a pitch. Just as in baseball, every role in a financial services team is defined with precision.

Every one of the nine positions has a precisely defined role.

Imagine a baseball team with no job descriptions. Nine people go on the field. The umpire throws out a ball. What do they do? Most likely bicker and argue over who is going to do what.

Ditto for a financial services team with no job descriptions.

Each team role is created in a document called a job description.

Each role within your team should be articulated in a job description, guiding everything from client retention to wealth management strategies. This ensures that each team member, from the most seasoned financial advisor to the newest recruit, comprehends their part in the overarching goal of the firm’s success.

We have job descriptions for every position you will likely hire for. You will need to edit those to fit your office, but it would give you a great start.

Before defining your own job descriptions for your team, I strongly recommend you download and study my guidebook, “Surefire Team Development.”

There, you will find some explanations of the overall team and the roles, which could give you a start.

Mistake #3: Poor Coordination in Financial Advisor Teams – A Synchronized Failure

Any coach, even of a bottom-ranked high school team, knows that a team must have team training and team coordination.

This principle is evident in sports, it’s foundational in military operations, and it’s absolutely crucial for high-performing financial services teams dedicated to financial planning and wealth management excellence.

A principal forum for this coordination is the weekly team meeting.

I’ve seen a highly successful $4M team that optimizes their performance with two meetings each week—one for the partners to strategize on delivery and client relationships and another for the whole team to focus on growth efforts, practice management, and precise delegation of duties. Both meetings are purpose-driven, with specific agendas aimed at ensuring team member roles are clear and processes are as efficient as possible.

A note of warning: Don’t let your team meeting turn into a complaint session. They should be strategic, aiming to plan outstanding service the whole team is involved with, refine operational efficiencies, and coordinate marketing strategies—from traditional referrals to LinkedIn networking and social media outreach. It’s here that the roles are reinforced, ensuring that service associates and business development managers alike know their tasks and are equipped to execute them to further the firm’s mission.

Mistake #4: Top-Heavy Financial Advisor Teams – The Imbalance that Drags Down Success

I’ve come across several teams lately with three partners, and one undoubtedly overworked assistant.

This is a case of the dog-cat-bird phenomenon.

You can call each of the partners a financial advisor. You can be sitting on your couch with a critter that barks. You can say to your friend, “This is my dog-cat.” Calling it something doesn’t make it so. Calling a person, a financial advisor in a top-heavy partnership does not make it so.

In a top-heavy scenario, at least one of the two partners is almost always primarily functioning as a service assistant.

You cannot have three partners doing $1.6M with one assistant, and assume the three partners are, in fact, three advisors. Calling it that won’t make it so.

A top-heavy partnership will most certainly plateau, and then break up. If you are top heavy, you need to urgently figure out how to get additional support so that the advisors can be advisors.

It’s about ensuring that the financial advisors have the support they need, allowing them to focus on their primary roles in financial planning, client retention, and growing the assets under management (AUM).

Mistake #5: Role Confusion – A Recipe for Mayhem

This is the original cat-bird. In building a team, remember, you need sharp delineation between the roles. The first job to establish is your client service associate.

Keyword: Service.

As part of the service associate’s job description, it should specify: Will not be asked to perform sales duties, except in an emergency.

Similarly, your marketing director, business development manager, sales assistant, call it what you will, should have a line in his or her job description: Will not be asked to perform service duties except in an emergency.

Don’t ask one to do the other’s duties.

Doing so creates a conflict of interest, leading to a team collapse and you just have a bunch of unhappy people doing stuff and arguing about it.

Don’t ask the shortstop to be a pitcher, and don’t send your catcher to first base.

Each team member has their specialty, and that’s where their focus should be—be it nurturing client relationships, growing assets under management (AUM), or spearheading retirement planning seminars.

Mistake #6: Unbalanced Pay in Financial Advisor Teams – Disrupting Team Building Harmony

Should my business development manager and client service associate be on equal footing when it comes to pay? The answer isn’t a straightforward one.

Yes and no.

First, I want you as an advisor to imagine you have two arms. Your business development manager is akin to your right arm. They are out there actively engaging in LinkedIn networking, leveraging social media, and enhancing your relationship marketing strategies to draw in business—both from current clients and your network.

On the other side, your service manager, representing your left arm, is pivotal in ensuring client retention. They are the ones making sure that your offerings in financial planning are delivered seamlessly, thus creating more space for you to engage in high-level financial advice.

In this analogy, which would you rather have—your left arm, or your right arm?

My answer would be, “I’m not willing to give up either.”

So, which is more valuable, left or right?

Start with the same base salary, and then add to it or take away from it, based upon qualifications and length of service.

Mistake #7: Retaining the Wrong Fit – A Costly Oversight

One of the most destructive things to a small team is having the wrong person on it.

The “wrong person” can often be disguised by many positive personal characteristics at first. It’s usually easy to root out the sour, dishonest, non-performing team member, but the “good person” is tough.

You could have, for instance, someone as your business development manager who has a great personality, a good work ethic, and blends well with the team. Everyone likes him or her, but the harsh reality is, they do not get the results required of the position. You keep working with that person, coaching them, helping them, but it doesn’t improve. Many will bend and twist the position in all types of ways to keep that good person around.

The fact is: Some people do not have the ability to bring the horse to water, much less make it drink. To leave that person in that job can bring down your team.

In a larger company, that good decent person you hired would be moved to another job. But the cold reality is that you are not a larger company. You are a small team.

Assessing whether a certain team member is worth it could be the difference between greatness and mediocrity.

And if your business development manager, service manager, or junior financial advisor, can’t get the job done, no matter how sterling their other characteristics, they must go. And they have to go fast.

The rule: When you start having second thoughts, make the second thoughts first thoughts and pull the plug.

Mistake #8: No Decision-Making Process – The Dynamics Dilemma

If there is a single factor responsible for the destruction of most teams, it is the absence of a decision-making process. This is especially apparent in a 50-50 partnership.

Bob says yes. Jane says no. And it sticks there. Irritation turns into anger. One person starts looking around. Sooner or later, it blows up.

The solution: An agreed-upon method to decision making.

In the case of a 50-50 partnership, you could have a simple rule as follows:

The partners will come to an agreement on significant issues in a reasonable period of time. Failing that, they will call in an agreed-upon third party who will cast a deciding vote. That ends the discussion. And the partners get back to work.

In a larger partnership where the senior partner may hold a majority of the shares, the rule is simple.

The partners will discuss any changes in policy, major expenses, personnel, and ideally come to a meeting of the minds in a relatively short period of time. Failing that, the senior partner will make the decision and end the discussion.

Don’t let disagreements blow up an otherwise great relationship. Work out a method to end disagreement and move on.

Mistake #9: Not Putting All the Eggs in One Basket – Strategic Missteps

When two or three advisors come together, each is naturally cautious and wants to protect what they bring to the table. That’s fine. But it’s only fine for a limited period. Once you have decided that you are a real partnership, all clients should be assigned a single partnership number.

The model of “ours, yours, and mine” is not a model that long survives. Such models rarely get featured in Forbes’s best-in-state lists.

The reason is very simple. “Ours” never gets the attention of mine and yours. “Our clients” get neglected for the simple reason that it’s always easier for you to make more money by talking to your clients than our clients. There is no economic reason for this model to survive, and very rarely does it last more than a year or two.

While you would not put all your investment eggs in one basket, all clients assigned to one number is the foundation for a partnership of long duration.

Mistake #10: No Team Vision – The Fundamental Flaw

A team is a group of people united by a common vision or mission. With no common vision or mission, the team becomes just a group of people doing stuff. It never develops the team dynamic. It is the responsibility of the financial advisor or partnership to develop a vision. From that vision, they create a mission statement. Further, it is essential that all current and future team members learn the mission statement and be able to repeat it from memory.

I read an interesting article on mission statements a while back. The author recommended that a mission statement not be longer than what can be comfortably recited by standing on one foot.

Can you do that with your mission statement?

Build Your Wealth Management Team with Bill Good Marketing

Building a successful team in the financial advisory world is a bit like assembling a jigsaw puzzle. Each piece is crucial, and if one is out of place, the whole picture doesn’t quite come together.

That’s where Bill Good Marketing comes in.

You see, we’ve been at this for over 45 years, and in that time, we’ve seen it all. Just like a seasoned captain steering a ship through stormy seas, we’ve guided thousands of advisors through the choppy waters of team building. We’ve seen the mistakes, we’ve navigated the challenges, and more importantly, we’ve learned how to overcome them.

With Bill Good Marketing, you’re not just getting advice; you’re getting a roadmap crafted from decades of experience.

We’re talking about turning your team into a powerhouse, where every member plays their part to perfection, much like a well-rehearsed orchestra hitting every note.

Don’t let your team’s potential just simmer; let’s bring it to a boil. Contact us, and let’s discuss how we can transform your team. It’s time to turn your team into the kind of success story I’ve been helping to write for over 45 years.

Ready to make your team the best it can be? Reach out to us. Let’s start this journey together.

Visit www.billgoodmarketing.com/contact and take the first step towards a legacy of excellence. Remember, in this industry, a strong team isn’t just an option; it’s a necessity. Let’s build yours.