I have a big ego.
As if that’s news.
Yeah, I realize I rankle some folks in the industry with my strong views and opinions. I’m pretty sure that I am better than you at managing assets and people, finding clients and delivering advice to them.
This explains why I created my own financial planning firm nearly 30 years ago: I was sure I could build and run a better practice than anyone else. I also don’t like being told what to do.
So when I started as a financial advisor, I did it my way and all by myself. I scheduled my own appointments and conducted every client meeting. I did all the analysis for every client, completed all the investment research myself and developed all the recommendations. I then personally presented my findings to each client, and upon approval I personally prepared and mailed all the paperwork to them. I opened all the incoming mail, too, processed all the checks, did all the trades and reconciled all the reports monthly. Everything was going perfectly—because I was doing everything myself, exactly the way I wanted it done and within the deadlines I set for myself.
But I quickly learned that there was a serious flaw in my strategy. Because I was doing everything myself, I was limited by the number of hours in the day. It wasn’t long before I couldn’t help any more clients because I simply ran out of time.
More than anything else, I wanted to help people. After all, that’s why I got into this business. So when I ran out of time to do more work each day, I realized that I had to figure out how to solve the problem—or I wouldn’t be able to help any more people. And that’s when I discovered what it was that was stopping me from doing better.
This big ego of mine was getting in my way.
Because I was convinced that I was better than anyone else, I insisted on doing everything myself. Not only did I think I would do it better, but I was also pretty sure I’d do it faster. I even figured that I could do things faster myself than explain to others how to do them. That even if I’d stopped to explain things to others, they wouldn’t have done things the way I would have done them. It meant I’d just have to redo them myself later.
My wife Jean showed me pretty quickly that I was, to put it mildly, insane. Jean quit her job and joined me to help with my workload. Almost immediately, she took over massive amounts of my work—paperwork, trading, mail, reconciliations and much more—and in short order I discovered that I had 40 hours a week of newfound time that I could use to meet with more clients. Our business more than doubled after Jean joined my practice.
And that was the epiphany. I had to sacrifice my ego. And once I did, our company was able to zoom to levels that are virtually unprecedented in our industry.
The key to building a successful practice is simple: hire great people, make sure they understand the firm’s mission and give them the tools they need to succeed. Then get out of their way. That’s it.
So: Are you willing to hire people, or do you insist on doing everything yourself? Consider the following 10 statements carefully, and ask yourself whether each is true or false:
1. You can perform most of the necessary tasks in your office better than any of your staff members can.
2. You care more about quality of work and about deadlines than your staff does.
3. You usually find it to be more efficient to handle something yourself than to explain to a staff member how it ought to be done.
4. When you review a staff member’s performance, you find something wrong most of the time.
5. You don’t take the time—maybe because you feel you can’t spare the time—to help staff members learn from their mistakes.
6. You become annoyed if a staff member makes a decision without consulting you first.
7. You are overworked, but your staff is not.
8. You’re the first one to arrive each day and the last one to leave.
9. You seldom praise staff members. They should take it as a given that you’re pleased with anything they do that helps the firm.
10. Few or none of your staff members have been with you for more than five years.
If you found many of these statements to be true, then your ego is getting in the way of you operating your IA business as efficiently and effectively as you could.
And you probably don’t realize it.
Advisors who are struggling in their practice usually tell me they’re just too busy. Do you feel that you have too many demands on you personally?
At a recent conference, I struck up a conversation with an advisor about what’s going on in our respective businesses. I mentioned that my firm expects to add about 5,000 clients this year. He laughed and said, “I’d love to add lots of new clients, but this year, I’m going to add just five.” I asked why and he said, “We’re just too busy. We don’t have the time to take on any more clients.”
I smiled to myself and thought, wow, this guy has a huge ego. He’s answering the telephone. He’s writing and e-mailing his own letters. He’s booking his own calendar, developing all the financial plans himself and handling all his clients’ trades. He’s handling his own compliance, as well as IT, HR, operations and accounting/finance functions. No wonder he’s too busy to serve more clients.
And he’s probably doing all those things because he thinks nobody else can do them better.
What I’d like him to know—and what I want to tell you, too—is that other people can indeed do things as well as you can. My ego convinced me that I’m better than everyone else, but my wife convinced me that my ego was insane.
Indeed, I’ve discovered over the years that I’m really not better than my staff at many essential tasks. The truth is that they are better at what they do than I am. One reason is they do their job all the time. They might not do it the way I would do it. They might handle it in a different time frame, perhaps doing one job in the morning and another in the afternoon. I might do them in reverse order. But at the end of the day, what does that matter?
Things at my firm get done. They get done on time. And they’re handled well. How could I ask for more? Why should I?
This reminds me again of the guy I spoke with at the conference. If his goal is to add new clients but he can barely bring in five in a year because he’s so busy, he’s missing the point. The advisors in my firm who are building their books each typically bring in about 50 new clients a year; they have the time to do that because we provide staff who handle everything else for them.
Yes, all financial advisors have pretty big egos. It takes a big ego to tell a person you barely know what to do with their life savings. And our egos make us special. But our egos also get in our way.
If you’re not careful, your ego can result in lower productivity at your firm, higher staff turnover, more stress and reduced profit.
I still have a big ego. It’s just not as big as yours.
Ric Edelman is the chairman and CEO of Edelman Financial Services LLC, a registered investment advisor. He is an investment advisor representative who offers advisory services through EFS and a registered principal of (offering securities through) Sanders Morris Harris Inc., an affiliated broker-dealer. You can connect with him on LinkedIn or on Facebook at www.facebook.com/RicEdelman. Follow him on Twitter at @RicEdelman.
Does Your Ego Limit Your Success?
August 3, 2015
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