Brokerage managers come in all shapes and sizes. Some promise financial advisors the world and deliver very little. Others are know-it-alls, yet have never worked as an advisor themselves. Still others treat commissioned advisors like salaried employees rather than revenue generators. More than a few create more problems than solutions. And, of course, some have all these traits to varying degrees.
But there are also great managers who bend over backward to help advisors grow. Those are the ones who have a full understanding of the industry and who value advisors for the work they do. Rather than seeing themselves as a supreme ruler, great managers view themselves as mentors and problem-solvers. And they view advisors as their customers.
Since reputation buzz can travel like wildfire, managers can build or destroy a wealth management division.
A great manager who adds value will often have advisors follow him or her to another firm. At the Rummage Group we often see this. Top-notch managers will have success wherever they go, because they know the key ingredients for success. They know how to add value to their advisors.
Then there are the times where an inept manager shows up at a new firm, and makes the advisors lives hell.
Several months later there is a mass exodus. Some sit and wait, hoping life will once again return to glory, however this rarely happens. The advisors who stay will have to tolerate this manager until he quits or gets fired.
Unfortunately, the wealth management industry is plagued with low-quality managers. Why is this? It starts with the level of success these managers had when they were in production.
The typical profile of a great manager looks something like this: They started out in production and probably spent three to seven years building a book.
For various reasons, they found their way into management and most often were forced to give up their books. This was a hard decision for them because they worked so hard to build it.
However, they had a calling for management, leadership, mentoring and building a teamand the money isnt bad, either.
The weakest managers typically werent ever in production or had a failed attempt. However, not all managers who failed at production are weak managers, but there is some correlation. Its hard to teach others to do something you have never done yourself. Relating to the advisors trials and tribulations or leading them with confidence is difficult.
Many of these poor managers jump from firm to firm creating problems for the advisors and the firms.
So what are the traits that make a great manager? Having spent the better part of my life as a producer, manager and consultant to the industry, I have gotten to know hundreds of managers. I have heard stories from advisors who have strong opinions (positive and negative) about their managers. And the same themes pop up time and again.
Below is a list of three common themes that make a great manager.
Great managers have an abundance of respect for financial advisors and the difficult job they have. Whether they themselves have had success as advisors or not, great managers truly respect the position.
They understand that advisors generate the revenue that pays their compensation. There is an understanding that more revenue means more compensation for everyone. They know how hard it is to find, close and service clients. Great managers respect how hard and expensive it can be to grow a practice, and help the advisors where they can. With the best managers, there is a personal connection and mutual respect that goes both ways.
Just like in football, where a great running back has great linemen, an advisor needs a manager who does their blocking. This industry is weighed down with compliance and operations. At some institutions, an advisor could spend 35% of their day dealing with compliance or operational problems.
It can be a mental drain and kill production. If there is an overbearing compliance department, great managers will find a way to relieve some of the pain. In addition, managers can help hire better sales assistants and pair them up with the best advisors based on personalities, goals and business models.
Managers should check in with their advisors on a regular basis to see where they can help relieve pain, thus creating more time for production.
A great manager earns respect by becoming an industry expert. Managers who have been around the block a few times, or at least done a lot of industry research, tend to have more respect among the advisors they serve.
A good manager has a thorough understanding of the ways to market and grow a practice. They understand the different model firms and competition.
This enables them to help their advisors with applicable strategies. A great manager has a plethora of connections with wholesalers, business coaches and other experts who can help their advisors learn and grow. They know all the key resources and contacts inside the company who can help the advisors. A top-notch manager acts like an air traffic controller, directing and connecting their advisors with the resources they need.
An exceptional brokerage manager can be a big asset to their advisors. However, a bad manager can be an even bigger liability. It reminds me of a saying I once heard: You dont need to help me, just dont hurt me.
Unfortunately the wealth management industry has too many managers who snuck into their positions and are hurting advisors.
These managers usually get fired eventually, but often times another firm picks them up and they go on to inflict pain on the next set of victims. It doesnt need to be this way. Every manager has the ability to become great. They might need to change their mind-set and invest some time in learning, but its possible. If theyre not leading their team on to greater success, then why are they there?
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