Still Another Important Step

Having satisfactorily answered the questions in our last post, what's the next step to forming a team? [Note: if you are already part of a team and did NOT answer the previous questions to your satisfaction, you may wish to discuss them as a team. If the results are not satisfactory, please visit our web site at www.GretzConsultingGroup.com. We can help.]

There are several steps you'll wish to take BEFORE signing any team legal agreements your firm or your own lawyer places in front of you. One of the most important is to answer several critical questions for yourself -- we don't necessarily recommend that you share the answers with your prospective teammates.

1. Am I prepared to make and keep the kind of long-term, come heck or high water commitment required to make a team work? Do I have that kind of stick-to-it when membership in the team becomes a pain in the neck [like all relationships, at times it will]?
2. Do I really believe the other members of the team have that kind of commitment?
3. This next one is even harder. Do I have the character to do the right thing when times get tough? [Please don't be insulted or give a flip answer. Really think about this one. We remind you that our recent "Black Swan" saw the demise of hundreds of teams throughout the industry.]
4. Do I sincerely believe that my prospective teammates have the needed character? Why? What makes you think so?
5. Am I prepared to court ALL of my new teammates for the rest of our careers as hard as I court my biggest clients? Courtship is the way we communicate to others that we value them. Soon after the courtship ends, so will the relationship. Remember, divorce is ALWAYS painful and expensive.

We realize that all these questions may make you wonder if a team is really the best answer for you. Good. Teams are really a great way to do business and the pros can far outweigh the cons. However, they are not for everyone and, like any relationship, they take constant, consistent effort to be successful. But, when they are successful, the payoff is huge in every way.
Thanks again. kfg

Key Questions Before Forming a Team

There are several things you must examine BEFORE you begin to create any kind of team. Among them are:

• How will income be distributed within the team [that includes ALL the members of the team, not just the investment advisors]?
• What process will you use to adjust the payouts over time as various members of the team increase or decrease their activity and / or responsibilities?
• Are you compatible emotionally?
  
• Do you share the same work ethic?
• Do you share the same investment and client service philosophies? [Note: this is incredibly important.]
• What are your respective areas of expertise? Are they the same or do you complement each others strengths and weaknesses?
• What role will each of you play in relationship [e.g., will one bring in new clients while the other(s) manage them and their assets]?
• How will you resolve conflicts within the team?
• Should the team divorce, how will you divide the assets?
• If one or more of you wishes to transfer the team to another firm, how will you make the decision?
  

These are just a few of the questions you need to address before making the needed commitment to create an effective team. However, addressing them now can save a great deal of money and hard feelings later. Good luck. kfg

Divorce in the World of Investment Advisor Teams

Over the last two years there has been a staggering number of divorces / breakups among investment advisor teams that had been together for years. What happened? What do you think? If your team broke up, why do you think it happened?

Among the most common reasons given has been the division of money during and following the "Black Swan" that devastated the financial markets recently. During the bloodbath, major firms went into a feeding frenzy trying to lure successful advisors and advisor teams to move under their roof. In the process, they spent billions of dollars to "buy" the assets these individuals and teams could bring to the table. At the same time, to stop the hemorrhaging of their own managed assets, firms began to offer substantial financial bonuses to their best advisors and teams to stay.

So, what's the big deal? In a down market, with falling fee and investment income, a big check can look pretty good. For many teams, the problem arose when it came time to 1) decide whether to stay or go, and / or 2) how the spoils were to be divided.

You may be tempted to lay it all on simple greed and, for a few, that was probably the case. However, the question is more complex and involves a variety of factors from the pros and cons of moving to a new firm vs. staying with the current employer to how each person on the team felt valued by the others on the team and how well that was communicated.

Over the next few postings, we'll be discussing just that and ways to avoid expensive breakups because, lets face it, divorce is ALWAYS expensive, whether its a marriage or a team. What do you think? Thanks. kfg

Getting Started

During the coming days and months, we at Gretz Consulting Group will be discussing topics of interest in the areas of consulting, coaching, training & curriculum design and web marketing to meet the needs of executives, managers and sales professionals. We welcome comments and questions of all kinds from interested readers and look forward to learning how you address the challenges in these areas in your business and industry. We also look forward to contrary opinions and questions. Thank you. kfg