“An empowered organization is one in which individuals have the knowledge, skill, desire and opportunity to personally succeed in a way that leads to collective organizational success.”

—Stephen Covey

The future of an effective wealth management practice is not solely based on how good their strategy is, or how successful their asset allocation models are, or how advanced their technology is; it will be about attracting the right people who embrace teamwork. The ultimate competitive edge will be that firm, office, or team that makes teamwork part of the culture, vision, and strategy. It all starts with who is on the team, and if any member of the team prefers solo endeavors, it probably means the team is already at a disadvantage. My brother, who is also my best friend, loves to ride his Harley Davison. He logs about 20,000 miles a year. He likes to ride alone because he doesn't have to compromise. If you ride with a group, you need to ride at the speed of the slowest rider. You may need to stop more often when in a group. You need to come to an agreement on destination. Therefore, my brother would rather ride alone most of the time. He clearly is a free spirit who marches to his own drum. For him, being on a team would be like cutting off his oxygen. On the other hand, if he found a few riders who shared his values, destination, endurance, and so on, the team approach would work for him.

The bottom line is that some people don't have the DNA to be a good teammate. Even those people who thrive in team situations still need to participate in the right training on a regular basis because things continually change. A team is always evolving and a team dynamic must continuously be cultivated. Getting a team to peak performance takes determination. Keeping a team in top form requires just as much determination. Why is it so hard? Because we are all different; we all have different styles, responses, and motivations. Doing whatever you want, when you want to and never having to be held accountable sounds attractive. But, when you're committed to playing your role on a team you can't have that attitude.

What helps to focus a team made up of different people with different drives is a united purpose and clearly defined roles. Why is the team doing what they're doing? What is the team hoping to solve? It can't just be about compensation. It needs to be about the client. Everyone needs to feel there is a common purpose. Look at any outstanding sports team—there is no denying that those teams that have a clear purpose play extremely well together. It's critical to clearly define performance expectations as well as openly discuss and resolve poor group performance.

Recruiting top talent is the key step in creating outstanding teams and creating outstanding teams is something leaders with a growth mindset do constantly and consistently. There's skill to establishing an outstanding team and not just putting people together and hoping for the best. Being on a team is not always easy. It sometimes means supporting another person, compromising, and communicating when you don't feel like it. Successful teammates must be flexible.

While there are plenty of situations in the wealth management industry over which we have little control, creating high‐performing, successful teams is something we can definitely control.

Essentials of What Makes a Great Team

• The members of a great team:
  • Trust each other
  • Respect each other
  • Like each other
  • Like to be successful and like to win

When clients are in front of a great team, they can feel it. It's like listening to a great band; you just know when they're making awesome music.

Elite Teams

In a BlackRock survey of elite RIAs, 44 percent of those surveyed indicated that their clients are served by a team rather than by an individual, as compared to other RIA firms in which only 30 percent of clients are served by a team. Instead, these RIAs assign almost half (49%) of their individual advisors to individual clients. Additionally, 74 percent of the elite RIAs indicated that they have an investment committee, compared with just 47 percent of all other financial firms, which rely on the traditional positions of a chief investment officer and senior research analyst. In the bank trust world, teams make the difference. While team‐driven practices are not yet widespread and adopted by the majority of large firms, it is an emerging trend that I believe could represent a significant shift in the service models employed by some of the industry's largest and most elite firms.

The team approach to client service is a powerful differentiator. Specialized teams operating within any firm can provide better service and increase levels of expertise in the full scope of wealth management. Because of increased competition and greater demands on the high‐net‐worth client it's becoming increasingly more difficult for one person to wear all the hats of a comprehensive wealth management business.

Generally, teams are organized with four or five specialized roles: portfolio manager, financial planner, trust advisor, relationship manager, and business development officer. There are times when the relationship manager and business development officer are the same person.

The biggest challenge I see for such teams is maintaining a strong leadership process, or full ownership from start to finish. Most of the time everyone collaborates effectively, but when one person takes the leadership role from the discovery meeting into the ongoing service of that account, that makes the difference. Often it's the relationship manager who plays this role, a leader who not only has all the necessary skills to do a great job as the generalist, but also excels in the business development role. I see this as the biggest opportunity to take a team's effectiveness to new levels.

I would add another critical skill to the team leader's arsenal: coaching. The coach has a front‐row seat every time the team is in front of a client and every time the team has a pre‐ and/or post‐meeting debrief. If the coach is trusted and respected by the other team members and can make small improvements to the overall approach, style, and delivery, he or she can have a substantial impact on the team's performance.

Most firms are focused on helping advisors with soft skills and relationship or sales skills. In the past, advisors generally managed the portfolios and focused on relationship building with the client. However, this format is changing and will continue to evolve. Today's advisors are being asked to do more. They have to manage portfolios in the most efficient way possible to create greater capacity in order to spend more time deepening client relationships and increasing wallet share. Part of their compensation is also based on net asset growth. In short, the CFA designation is no longer sufficient; the advisor also needs the relationship, collaboration, and communication skills that can lead to outstanding performance for both the client and the team.

In the wirehouse or independent broker/dealer, a focus on teams has been steadily growing over the past 20 years, although there is still much to be done. From vertical teams to horizontal teams, some are more effective than others. Since we have an aging advisor population, teaming and succession planning is something that more organizations are implementing.

At the end of the day, what does this mean for the client? Is this for personal gain only? After many years of seeing different models across all the channels, I'm absolutely convinced that a highly effective team helps the client much more than a sole practitioner. When I asked one team, “What makes you different from others?” they were quick to respond by saying, “Because we work so well together we can deliver superior client service, comprehensive financial planning, an outstanding investment process, and strong performance.”

Remember, it's not a team in and of itself that makes a firm different from others: it's a team that's effective, passionate, brilliant, and kind to each other and their clients.

An Elite Team

• Is all things to some people
• Fully leverages the firm
• Values speed and collaboration
• Delivers a disciplined wealth management process

On an Elite Team

• Everyone can articulate a clear belief and execution of his or her value proposition.
• Everyone is committed to delivering excellent client service and investment results based on the clients' objectives.
• Everyone is dedicated to new client acquisition and asset growth.
• Everyone proactively builds client loyalty.
• Everyone respects and trusts one another.
• Everyone is committed to improving; members challenge each other and ask for feedback.

Dysfunctional Teams

Successful teams help increase revenue growth, asset growth, profitability, market share, improve client and employee satisfaction. The only time a team doesn't make sense is when it's dysfunctional. Unfortunately, I believe that in the wealth management industry, most teams are not operating at their optimal level. Although many wealth management firms have good intentions about organizing as teams and team‐building, too many of the teams are dysfunctional.

Teams are not effective when their members:

• Don't fully trust each other
• Don't fully respect each other
• Fear conflict
• Have different levels of commitment
• Spend little or no time on improvement
• Do not recognize each other
• Let individual egos get in the way
• Have poor communication skills
• Don't fully appreciate and understand the competition
• Don't value speed and have no sense of urgency
• Lack the passion and the appropriate skill set to add value
• Simply don't like being on a team

Most importantly, teams are ineffective when they don't have a clearly defined leader. I'm not talking about a leader whom they report to. I'm referring to the leader who's part of the engagement process.

When a team has no leader, there is no one to hold people accountable. How a team is structured—horizontal, vertical, situational, and so forth—is paramount to its success but highly idiosyncratic to the specific project or organization. What is never idiosyncratic is leadership. Every team needs a clearly defined leader.

Healthy Conflict

Healthy conflict involves communicating in a professional and generous manner. Outstanding teams have healthy debates and an unfiltered exchange of ideas and feedback. Nobody walks on eggshells because everybody understands that conflict is vital to the success of the team. Diversity in thought will almost always result in a better client outcome.

Even though the word conflict might have negative connotations, healthy conflict is free of sarcasm, put‐downs, and personal attacks. It is characterized by team members who respect one another, listen to gain understanding, and debate to find solutions. That's why emotional intelligence is so important. A team with low EI will always be struggling to improve.

Empowerment

Finally, and most importantly, great leaders empower their teams. They learn quickly that real power comes from others. It is by unleashing each individual's strengths that a leader can achieve extraordinary results. By empowering others, as a leader you show you are willing to share power. It shows you trust them. As a result, you can move with speed. Freedom and creativity come from a team that's empowered. Frameworks and boundaries are important but outstanding performance from a team is impossible without empowerment.

Consider this:

• Recognition is vital: recognize your team as people and not just advisors. Recognize them not just for production or asset growth, but also for things like achieving their personal best, reaching major milestones, and special events in their lives, such as an addition to the family. Did John just become a father? Celebrate John with his team. Recognize the right behavior, not just a successful outcome.

The Ideal Team Player

• Has a growth mindset
• Is humble
• Has a high IQ
• Is someone who can be trusted and respected
• Likes people
• Has confidence
• Is competent

A team that wins together also loses together and grows together. If the stakes are high enough, the team comes together much faster and works with greater collaboration. Make the stakes high, be bold, and climb a higher mountain. Focus on bigger relationships, ones that will stretch everyone. By doing so you will increase your performance. Finally don't fight the current. Don't try to force people to work together. Just like you can't beat a river into submission, stop wasting energy fighting the current. Stop wasting time trying to motivate those that are unmotivated. However, for those who are motivated, a great team working together will perform magic for the client relationship.