Who says advice is only worth what you pay for it?
Sure, lots of broker-dealers offer their reps
business development services, but how many have Joni Youngwirth at the
helm? Only one, of course, and that's Commonwealth Financial Network in
What's so special about Youngwirth? How about the career history and specialized training that make her the perfect advisor to reps, not to mention the passion she brings to her position, vice president of practice management. In fact, Commonwealth may not be the only broker-dealer that has a practice management department, but it probably has had one longer than any other firm.
Featured in this publication's October 2001 issue, Youngwirth was said to ask reps exhilarating but often uncomfortable questions like, "If they were doing your eulogy today, what would you want them to say about you?" and to insist on them completing a business plan, a mission statement and a personal-vision statement of how they want to live their lives. Sounds more like something you'd get from a combination of George Kinder and Mark Tibergien than from the typical broker-dealer. But, then, it is services like the ones provided by Youngwirth's department that make Commonwealth atypical.
Youngwirth knows how to ask the tough questions because she spent ten years in a 300-person firm consulting with the GEs of the world. Although not exactly the same as counseling independent small business owners, she says, "The process of consulting is pretty transferable from industry to industry and from large to small firms."
Yet, her background wasn't enough to give her reps everything they needed. "I had to learn the language of the financial services industry and acquire formal coaching credentials. There's a difference between coaching and consulting. The coaching helps me be very direct with reps and they value that," she adds.
What does the rep pay for Youngwirth and her department's services? Nothing. It's already factored into their payout. And what form do these services take? "Probably 60% of the way the five of us in the practice management department use our time with reps is one-on-one," says Youngwirth, who was preparing to conduct a one-on-one call with a rep in Wisconsin following our interview.
Her department spends the other 40% of its time working with groups of reps or doing projects that ultimately end up as Web-based resources. "Four years ago, one of our reps stopped me at a conference and said, 'Thanks, you saved us so much time when I was hiring someone and found much useful info on the Web site that facilitated the hiring process,'" says Youngwirth. "Once they've downloaded something, such as an employee handbook, they don't have to start from scratch. And if they don't find what they need, we'll go build something and upload it."
We asked Youngwirth to name the five issues cited most frequently by reps and how she and her associates solve them. Those issues, replied Youngwirth, are growth, efficiency, staffing, succession and other concerns.
Typical questions Youngwirth gets from reps about growing their practices are:
"How can I accept more 'A-clients?'"
"How can I keep more of what I make?"
"How can I target a niche?"
The single most effective strategy for helping reps grow their practices just may be the marketing campaigns Youngwirth and her team create. "For years, we've ghost-written articles for advisors' clients or prospects, but we realized those efforts were a one-shot deal with limited impact. So we began creating 'campaigns,' each being two months long and targeted at a specific niche. For example, one is targeted at women and busting stereotypes about their incompetence as investors," she says.
Youngwirth's campaigns give the rep who uses them a marketing task every week during the campaign's two-month run. As part of the aforementioned women investors campaign, the rep might do a giveaway of the book The Millionaire Woman Next Door one week, while disseminating an article ghost-written especially for the campaign the following week. Says Youngwirth, "This is marketing that's preformed for our reps, designed to address directly the issue of getting and retaining more clients."
Group efforts to explore growth are also addressed by the team's Winning Ways (Webex-style) teleconferences-series of 45-minute calls, which each are attended by eight reps and focus on different topics every two weeks. "The reps bond on these calls, they meet face to face at conferences and, ultimately, these meetings reinforce their need to keep doing those things that are working for them," says Youngwirth.
Typical questions Youngwirth gets from reps about efficiency are:
"How can I make better use of Commonwealth's technology platform?"
"How can I run a more streamlined practice?"
"I never see my family ... how can I keep up?"
Commonwealth offers its reps an ever-evolving technology platform it calls "Wealth Management 360." Says Youngwirth, "If you look at an independent rep's office, they need to do research, performance reviews, proposal generation and they need a CRM [customer relationship management software], and a few other office tools ... Other than that, it's just bells and whistles." Commonwealth focuses Wealth Management 360 on those critical tasks.
"If you think about what wealth management is, and the need to have a 360-degree view of the affluent client, Wealth Management 360 enables one to see everything about a client on one screen," says Youngwirth. "It looks at estate planning, taxes, risk management and other planning areas, and allows consolidation of all accounts for a household."
Commonwealth also addresses efficiency questions with its "NIGO Tracking" service. "'NIGO' stands for 'Not in Good Order,'" explains Youngwirth. "If reps fill out paperwork incorrectly, the paperwork must be sent back to the rep and the whole process takes longer; God forbid it must go back to client. We want reps doing their paperwork right the first time. NIGO is an assessment procedure that gets them there."
In line with NIGO Tracking, Youngwirth's team also helps reps "E-Myth" their practices. "We might talk with a rep about the process their office uses when a new client comes in. If something's a repetitive procedure-like confirming the appointment, telling the client what to bring with them, sending something back to the client after the meeting-we help the rep develop a checklist."
Having reps E-Myth every process in their offices isn't necessary, though. Says Youngwirth, "We help our reps step back, take note of their three or four most important internal processes and make them repetitive. It's simply not efficient to have procedures change dramatically every time the rep has a change in staff. The process should stay with company, not the employee."
questions Youngwirth gets from reps about staffing are:
"How can I find great employees?"
"How can I terminate an employee who's a friend?"
"What new immigration laws do I need to follow?"
"When planners come to Commonwealth, they may not have hired an employee before," says Youngwirth. "We need to almost hold their hand and teach them the hiring process steps-how to write an ad, how to screen the applicants and how to make an offer." Youngwirth uses an instrument called a "Predictive Index," something like the Kolbe Index, which is designed to reveal the instincts that drive a particular individual to take action and to identify certain jobs at which the person might excel.
"An applicant can complete the Predictive Index online in ten to15 minutes, we get it and process it and send the planner a paragraph that summarizes the results," explains Youngwirth.
Ultimately, her team consults with the rep on the two or three top candidates using the Predictive Index summary paragraphs as a focal point. They compare the rep's job description to the Predictive Index results to see which candidate matches best. Then, the question of how the new employee will fit in with the rep's other staff is considered.
Once the new person is on board, he or she can be sent to Commonwealth's "Assist U," a basic training conference. Says Youngwirth, "It's a one-day nuts and bolts conference that helps the new hire understand operational issues and do things right the first time." The new staffer also learns how to seek help from Commonwealth's home office. "As a broker-dealer, we have a fairly large staff compared to most other BDs: 300 employees to 1,000 reps," says Youngwirth. "Staffers learn who their key contact is in different areas so they'll feel comfortable picking up the phone and asking for help."
Typical questions Youngwirth gets from reps about succession include:
"What's the value of my practice?"
"What claims does Commonwealth have on my clients?"
"How do I find another rep in my area to buy my business?"
"We use FPTransitions' (www.fptransitions.com) multiples when helping a rep value his practice. As for stealing clients, that's not who we are; we don't have financial planners on our staff. If you leave, please take your clients with you," says Youngwirth.
She says Commonwealth has very low turnover among its reps but, for those who do want to sell their practices, Commonwealth has a cadre of lawyers who know the industry and have worked with Commonwealth reps in the buying and selling of practices. For those just concerned with succession planning and not looking to get out, Commonwealth maintains sample buy-sell agreements on its Web site.
In addition to reps' top four concerns, there are also those that just don't fit nicely into one of the above categories.
Says Youngwirth, "I received a voicemail recently that said, 'Joni, call me back, I'm so bored.' This came from someone who's enormously successful, earns seven figures, has lots of clients and does lots of annual reviews. The question is, how do you do that 2,000th annual review with the same vigor as the first one?"
Or the question might be: "Could you help me fire my wife, who's my bookkeeper? Her product is no longer good enough for what my business has evolved into."
These kinds of questions deserve and get one-on-one consultation from Youngwirth or her team members. Do reps appreciate it? "In 2004, 839 of our 1,000 reps took advantage of our practice management advice," she says.
Youngwirth's department makes road shows across the nation several times a year. Last year, "ten of us went across country, stopped in 12 major cities and had one-day meetings with a representative cross-section of Commonwealth reps," says Youngwirth. "Ours isn't just a 'for-show' department."
David J. Drucker, M.B.A., CFP, a financial advisor since 1981, sold his practice 20 years later to write, speak, and consult with other advisors under his new banner: Drucker Knowledge Systems. Learn more about his latest books at www.daviddrucker.com.