On The Other Hand…

Like Tevye in “Fiddler on the Roof,” many of us can readily identify with managing our way through a world of constant change, fighting to adapt to the demands of a new generation with a very different view of how things should be done today or how they may be done in the future. As leaders of financial services firms, we must find a way to constructively navigate changes to our own long-held traditions, lest we find ourselves singing a woeful song of “A t t r i t i o n__, Attrition:__ Attrition!”

Agency leaders can play a critical role in fostering practice succession strategies that maximize the three R’s—client retention, new-advisor retention and the senior-advisor’s business value retention. In our experience as a firm, the potential obstacles to a successful mentor/mentee relationship are many and require very intentional and directed processes for candidate vetting. Recruiting into a relationship or teaming for succession from within the organization, facilitating (initiating and monitoring) or transitioning effectively can be especially challenging.

While space will not permit a detailed examination of all these intricacies, perhaps we can discuss a few core components of each.

Personality compatibility is an obvious starting point. Remember the mentor/mentee need to get along with each other as well as conduct meaningful business.

A properly vetted relationship can be a catalyst for re-invigorating opportunities within the senior advisor’s practice and energizing the creative juices of the junior advisor. This should be evident regardless of whether the ultimate “transition” is months or years away, or even if it is strictly a team exercise.

This is a process that often benefits greatly from an outside objective perspective assessing and giving proper weight to each person’s social style and the potential for complementary additive skills.

One without the other can be a recipe for disaster. No matter how much a senior advisor might benefit from a younger advisor’s technical skills, for instance, pairing a “driver” personality style senior with a true “analytical” junior is a venture that is likely doomed from the outset.

Occasionally, we have seen these pairings and/or teams spontaneously combust based solely on “chemistry” and old-fashioned “want to” on the part of the advisors involved. It is exciting when the mere idea of what could be bursts into a consuming fire of growth and activity.

It has usually been our experience that even if all the right pieces are in place, a bit of priming, tending and some poking around are required in order to sustain the flame. Again, a good coach or firm leader can provide insight into what is necessary to achieve the results desired by all parties.

Many times the firm leader will need to provide a framework for how to begin, monitor progress and brainstorm with the team(s) as to the next initiatives to move the business along and engage in some prodding of the parties to hold up their end and maintain momentum.

If the relationships have immediate momentum and the parties involved have the proper business acumen, plus clarity about timeframe(s) and mutual expectations, they may be perfectly capable of and inclined to create their own working agreements. If so, the firm leader/coach has facilitated the forging of this partnership. Mission accomplished.

Typically, the leader’s role is absolutely critical in formulating and formalizing a successful succession strategy or sustaining the functionality of a high performing advisor team. The firm leader should be prepared to provide the framework for practice valuations in succession scenarios and acquisition structures (including financing options) and best practices for maximizing value to all parties for the various teams.

On the Other Hand
Leaders must take the initiative to challenge standard succession planning practices so their agencies can adapt to changing needs. With these strategies they can successfully navigate to maximize retention of their clientele, and retain new advisors and the value of the senior advisor’s practice. And then, together, they can face the future with a fresh perspective.

Bruce Davison, CFP, is a builder general agent with Ohio National Financial Services and president of Strategic Financial Concepts, based in Wichita, KS. He began his financial services career in 1985 and spent several years as a representative, field director, sales manager and general manager for a Kansas City based financial services company. Sensing a need to provide clients with a greater degree of operational independence, Davison founded Strategic Financial Concepts, Inc., in 1993 to help individuals, businesses, agri-businesses and professional practices plan for a more successful financial future.

Davison can be reached by telephone at 316-262-2929. Email: davison@sfcinc.net.