Holistic Planning Can Step Up Returns

Advisers who team up and use outside specialists provide higher client satisfaction and achieve greater returns, says Bellaria Jimenez of MetLife Solutions Group.

True holistic planning, according to Jimenez, managing director at MetLife Solutions Group, focuses on the full financial planning picture to better understand the client’s situation and its impact on financial decisions.

But the word holistic can also describe the practice management component. MetLife is a multi-disciplined company that’s similar to a basketball team, Jimenez says. “Each player has his or her specialty, but everyone must work together to win the game,” she says. The approach brings client satisfaction and success to the advisory firm.

According to Jimenez, since July 2011, 678 producers in 181 teams enrolled in MetLife’s Team Compensation Program. The following year, new advisers in team-based practices with a length of service from one to four years had a per-representative gross dealer concession (GDC) that was 50% higher than their solo counterparts, or about $1,502 compared with $996.

Team support needs strong leadership, Jimenez says, but multi-disciplined companies can more easily increase productivity and profitability. They can also more easily diversify their businesses.

One of the most difficult parts of the approach for any adviser is getting past the reason to build a business that depends on a team, Jimenez says. “Advisers come in as sole practitioners,” she tells PLANADVISER. “There’s a certain distrust to working with others. The best thing is to start with one relationship at a time and build strong relationships to a true partnership. Put together a business plan that says we can approach the market as a team.”

Jimenez points to Home Depot as a good example. “Small hardware stores can’t compete,” she says, but this is what customers want. “You can get everything done under one roof. People don’t want to go to 10 advisers to get their financial house in order. They’re looking for one person to look at everything.”

A holistic approach takes a client’s entire financial picture into consideration, Jimenez says. Hurricane Sandy was a perfect example of how an adviser could miss key factors that impact a client’s situation. Anyone affected by the storm would have had a huge financial burden. “So property and casualty insurance could be a key component of that client’s picture,” she says. 

Teamwork Approach

No one adviser can specialize in all areas, so the team approach can solve the problem of handling different aspects of a client’s financial life. The adviser really has to help a client review everything that could affect their situation, Jimenez points out.

A single adviser can start by looking at his or her network to identify possible business partners. In some cases, an adviser might want to think about creating formal partnerships or alliances in which they would need to look into getting proper licenses. Over time, those alliances could expand to become more ingrained and part of the team. An adviser identifies other advisers who maintain a strong practice or specialization in an area where they wish to expand, or offer services, and a partnership can then begin.

Jimenez says the institutional arm of MetLife has subject matter experts who can add value to growing accounts, specifically in this area where specialization is very important. Team selling is critical in this market to offer the institutional client a full menu of services and to provide support with ancillary products.

After the notion of team selling becomes more familiar, the adviser can look at other areas to approach as a team. A firm might consider working with an insurance specialist to cover protection, disability and life insurance, and property and casualty; another team member could manage investments.

Team selling doesn’t have to be product-driven, Jimenez says. Different team members can take on different specialties to offer a full menu of services. “Someone could focus on estate planning,” she notes. “Others could take on marketing for the team. The service or relationship management component is a key area, to make sure your clients stay with you for successive generations.”

Before expanding, advisers should take a good look at the specialties of each person on their team and think about other areas they want to address or improve. The adviser should also think about the long-term vision of the company when looking to expand their team. Partners should complement the practice and approach with a different mindset to build clientele base, and expand the practice exponentially.  

As the market has become more complex, client needs have evolved along with these changes, Jimenez points out, and the successful business will develop a team of specialists to serve these diverse needs.