As financial advisory firms grow, the need to provide efficient ways to hire, manage and properly compensate employees also grows. Some firms that begin as a one or two-person practice can grow to be a much larger firm over time. However, if the same management techniques that were used with the smaller firm are continued with the larger version of the firm, a point can be reached that is called a revenue ceiling. This is where no matter how much money is spent on systems or people, the firm experiences a point above which net profit does not increase. This is because the owners/managers are so consumed with more hands-on management, they find less time to work with clients (which is usually the owner/manager’s best use of time).
Consequently, finding more efficient systems and techniques to manage the larger firm should be a priority. Fortunately, there are lots of choices, but unfortunately this is not a one-size-fits-all environment. Thus, care should be taken in doing research to find which technique, system and/or software is best matched with your company’s needs.
One critical technique to be considered is efficient communications, not only with staff but also with clients. I recently spoke with best-selling author and keynote speaker, Dr. Tony Alessandra, who has published several books on this subject. With his social styles matrix, he outlines how a manager (i.e., financial advisor) needs to become a chameleon, at least with respect to being able to alter his/her social style to best match up with the person being communicated with. The social styles matrix looks like this:
The four blocks represent the dominant social styles. The arrows reflect the receptive style. For example, a “driver” social style may best match up with an “amiable” in communications. The “expressive” style matches up with the “analytical.” Hence, the financial advisor who is talking to an employee or staff person needs to be able to recognize their social style and adapt accordingly to achieve the best communication.