Many of you may be too young to remember Erich Segal’s book Love Story (or the movie starring Ryan O’Neal and Ali MacGraw). But like many stories of this type, it offered tension, passion and hardship. The couple had to deal with all these things because the implied message was that they were everything to and for each other. Spoiler alert: She died at such a young age that they never realized that they weren’t everything to and for each other. Because no one person can be all there is.
This myth is perpetuated in our business as well. No one person is everything a client needs. We may offer most of what a client needs or wants, but we can’t provide everything.
What is the answer? Instead of thinking Love Story, think Moneyball, another great book turned into a movie.
In Moneyball, Michael Lewis wrote about the way baseball scouts underused objective statistical measures and overvalued subjective things such as whether someone “looked” like a baseball player. The book recognized that limited budget teams don’t need to replace five-tool players (those who have a high batting average, hit for power, field, run and throw) with other five-tool players they can’t afford. Instead, a team can replace aspects of one player with multiple others.
When we think about serving clients and building a business, most of us don’t have the relational, technical, strategic and detail skills to do complete work. In a practice, maybe we have hired people to cover our weaknesses. But as our firms grow, we are likely to get frustrated that those people we hired haven’t turned into us. Let me break the news to you: “Us” isn’t all it’s cracked up to be. Most of us aren’t five-tool players either.
Instead, let’s think about it from the clients’ standpoint. They have needs, and we have to figure out how those needs can be met. That means smaller organizations may have to outsource the things they can’t do.
Our firm, Accredited Investors Wealth Management, has 50 employees, and we can do many things internally. Even so, it is not as easy as it seems to mix and match teams. I would break down staff responsibilities by the following areas of focus (remember, most of us are pretty good at some, but not all of these categories):
1. Relationships. This area of responsibility is left to those able to understand and care about clients and regularly think about them, as well as relate to them on their level. Clients have different personalities, and not every client works well with every employee’s personality.
2. Strategies. This area is for those willing to explore ideas that consider the clients’ uniqueness and how the clients’ goals and objectives are different from every other client you work with.
3. Technical issues. This area is for those with expertise on the specifics of financial planning.
4. Implementation. This is the focus of those who make sure that ideas presented and agreed to are regularly reviewed and followed up on.
5. Compliance. Those with this focus are responsible for making sure that everything done for the client is legal and ethical.
Our firm is set up so that our clients belong to the firm, rather than to any individuals within it. We offer our advisors firm-wide profit-sharing calculated using EBITDA rather than rewards based on production. These two things are important because they encourage staff to be collaborative rather than competitive.
All the wealth managers at our firm are responsible for a strategic planning area in addition to their client responsibilities. These planning areas cover everything from Social Security, to local assisted-living facilities, to tracking debt options (mortgages, home equity loans and margin arrangements). We can turn to an expert in a specific area when we have questions about it. We also have an internal tax specialist, an insurance specialist and a legal specialist (though those jobs can easily be outsourced).
Our wealth managers are not responsible for investment management. Our investment managers are assigned clients and typically are in client meetings for 10 to 15 minutes. The wealth managers and investment managers confer when cash comes in to understand the clients’ taxes and cash-flow needs.