Collaboration is the effort of many to build a result in which the whole is greater than the sum of its parts. In the financial profession, there are many different ways to build a collaborative environment and create game-changing dynamics in the team effort.
To explore this concept, Financial Advisor interviewed advisors at three very different firms to discuss how they collaborated with clients.
Take Charles D. Haines, the principal of his own namesake financial planning firm (www.charlesdhaines.com) in Birmingham, Ala. Haines, an MBA and CFP, works with a licensed clinical social worker, also an assistant professor at a local university, and has developed a specialty in what he calls "family systems," to study the convergence of family psychology and money. He describes his practice as "life planning on steroids."
"The family system," he says, "similar to a biological system, is one where if one part of the system is affected, the rest is affected too. Thus, exploring the impact of family dynamics on estate planning decisions is crucial to the process."
"In very brief form, family systems counselors believe that usually, not always, the greatest forces in one's life exist outside the individual and reside in the family," he says. "Just like a team at work, the whole team is a system, and one needs to work on the team, changing team behavior, and influencing every member. When the team or family culture and ways of operating are changed, then the individuals adjust accordingly. Doing it this way is much healthier, effective, and long lasting because the change in the team helps effect change in the individuals who in turn help reinforce and advance change in the team and continues in a virtuous circle."
He refers to money as a frozen energy, either a negative or positive force depending on how it is handled for the next generation. For wealthy clients, the firm uses the Heritage Process (www.theheritageinstitute.com), which is an established process of estate planning and management. To facilitate the collaborative process, Haines has developed what he refers to as a verified family package (that provides balance sheets, information on and about the client, etc.). The package includes confidential questionnaires that are "verified" with current bank/investment statements and other relevant third-party sources. This package of information, once verified for accuracy, is shared with collaborators. He also uses online video conferencing as a communications portal with those collaborators.
By bringing all parties into a video conference at the same time, everyone on the team is able to share ideas in a real-time setting that is highly convenient for all parties involved.
Haines also stresses the importance of collaboration with other advisors in established study groups. He is a member of one such study group called the Alpha Group (20/20) and uses that venue to share due diligence ideas, management techniques, etc. with other financial practitioners.
Haines is a member of the Financial Planning Association (FPA) and a founding member of National Advisor's Trust. He uses both these organizations for collaboration with fellow practitioners as well.
Another organization focused on collaboration is the Institute for Advisor Advancement, a platform for advisors and others to learn how to collaborate with each other and with other advisors, bankers and CPAs. The institute is the brainchild of CFP Ralph G. Adamo, also the founder of Integrity Wealth Management (www.integrityiwm.com) in Newport Beach, Calif. Adamo hosts community events to provide entertainment, sharing of ideas, problems and solutions while addressing the need for collaboration.
Integrity works with non-profit organizations as well as individual clients. In the non-profit area, he chose to become a subscriber of the Donor Motivation process, through the Institute for Family Wealth Counseling (www.institutefwc.com), an organization that takes advisors and their clients through the gifting process, a confusing area that often requires mental calisthenics. The Donor Motivation Process steers clients toward a realization of their gifting desires within the larger context of their estate planning needs. It incorporates more than just numbers and embraces the emotions of gifting while sorting through the financial issues.
Adamo strongly believes in the importance of collaboration through community involvement. He serves on the advisory council at Choc Children's Hospital in Newport Beach (www.choc.com), and this work has allowed him to develop relationships with other council members, many of whom have begun working with his firm.
In addition to his volunteer work with the children's hospital, Adamo also serves as a board member to the local FPA chapter in Orange County. He has found that the people he has met there have been invaluable in helping him identify and develop potential collaboration partners.
He also mentions that California (unlike many other states), allows CPAs to take profits by collaborating with financial advisors. As he puts it, "They can connect with an economic glue."
Elaine King, meanwhile, a CFP in Coral Gables, Fla., has also become involved with a number of different entities to expand her network of partners and potential partners. King is the director of financial planning at Gibraltar Private Bank & Trust (www.gibraltarprivate.com). She's also a member of the Institute of Divorce Financial Analysts, currently serves as president of the Miami-Dade chapter of the FPA, works with the International Academy of Collaborative Professionals (IACP) and serves on the board of the Collaborative Family Law Institute. King is also a certified divorce financial advisor (CDFA) who works with attorneys, mental health professionals and financial planners to make marriage dissolution easier for clients.
Her collaboration team has two attorneys, one financial planner and one mental health practitioner. At first glance, one might question why a mental health practitioner is used. The issue with collaborative divorce is working through the extreme emotional issues while maintaining focus on the financial needs of the relative parties following the divorce. Often, divorcing couples lose sight of the financial issues when they are clouded by emotional distress. The mental health practitioner works to maintain the mental focus of the two divorcing people while acting as a buffer between the clients and the professionals.
Elaine may also occasionally add forensic accountants, business valuation specialists and even estate planning attorneys, meeting with these professionals once a month to discuss issues and share referrals.
The common thread here is these three professionals' commitment to community involvement and the use of outside organizations and affiliations to make their businesses better. It was clear that their involvement in outside organizations was not merely self-serving. They all said the involvement was born out of a desire to learn, to grow and to help others. The further collaboration opportunities they found afterward were a bonus.
Oddly enough, none of them mentioned social networking sites such as Facebook or Twitter, or professional networking sites such as LinkedIn or Plaxo. Nor were they using collaboration features, such as those found in Naviplan (www.naviplan.com) or MoneyGuidePro (www.moneyguidepro.com) or collaboration portals such as the Family Office Network (www.familyofficenetwork.com), Junxure's ClientViewTM Live (www.junxure.com) or Advisor Products' Personal Client Portals (www.advisorproducts.com).
Instead, these professionals prefer face-to-face communications. While patently inefficient on the front-end, the results may very well make up for it.
David L. Lawrence, RFC, ChFE, AIF, is a practice efficiency consultant and is president of EfficientPractice.com, a practice consulting firm based in San Diego, Calif. (www.efficientpractice.com). The Efficient Practice offers an advisor network and a monthly newsletter.