PANC 2017: Team Structures

How to best serve your clients and know when to grow your practice.
At the “Team Structures” session at the 2017 PLANADVISER National Conference, Thursday, panelists discussed the importance of having senior team members serve clients but also having junior members attend meetings to ensure continuity of service. Additionally, they explored various strategies retirement plan advisers can take to grow their business.

“Growth is a good problem to have,” said Rich Eagar, a retirement consultant with Ascende Wealth Adivsers, Inc., the retirement consulting division of EPIC Insurance Brokers & Consultants. He suggested that when a retirement advisory practice first begins to think about division of labor that the leaders “find out who likes to do what—who likes to handle investments, who is strong in pension work,” etc.

Equally important, Eagar continued, is “making sure more than one person is assigned to a client” so service is uninterrupted. Ascende assigns a senior adviser to each account, to be the “face of that account,” Eagar said. Partnering with the senior adviser is a director of retirement, who is responsible for generating progress reports, he said. When the senior adviser meets with the plan sponsor client, he is always accompanied by three to five associates.

In terms of growing a retirement advisory practice, Joseph Lee, senior vice president and head of retirement platforms and strategy at First Eagle Investment Management, referenced a model that was introduced by psychologist Bruce Tuckman in 1965: forming, storming, norming and performing.

In the forming stage, Lee said, the team leader is driving growth, and the average assets under advisement (AUA) are less than $1 billion. In the storming stage, when assets have reached $5 billion, other members of the team are taking ownership of plan sponsor clients’ day-to-day business, giving the team leader the leeway to handle conflicts, he said.

In the norming stage, when assets are approaching $25 billion, “responsibilities have become clearer, and people are running with it,” Lee said. Finally, in the performing stage, with assets now at $350 billion or more, “everyone on the team is running at full speed and thinking about the next win, with the mindset that attracting new clients is everyone’s responsibility,” he said. “However, according to research by Ann Schleck & Co., only 17% of teams are elite, running at top efficiency.”

NEXT: Finding the right people
For any individual adviser looking to grow his business, building a team is the inevitable next step, Lee said. “There is a cap to the number of plans an adviser can handle—but if they have a team, they can be more effective.” If you are an adviser in the early stages of expanding your business, Lee recommended “build[ing] a team to fulfill strengths you don’t have. It’s really about finding the right people to do the right tasks for the right reasons.”

Not every advisory practice has the same areas of focus, Lee said. “Figure out your business development model—how you differentiate yourself,” he said. For instance, if your practice distinguishes itself by offering one-on-one meetings with retirement plan participants, it obviously makes sense to hire staff who can handle employee education, he said.

And don’t offer the same services to every client, he said. Rather, “tier your client service model. You have to be constantly planning and executing in order to grow.”

Eagar added, “I like to keep things as simple as possible. Ask yourself what you are looking to get out of growth efforts. What do you need help with? Growing for the sake of growing is not as important as becoming more efficient.”

So, where does Ascende get its ideas for how to grow and when to expand? “We ask new hires for new ideas,” Eagar said. “We also realize that if the business is getting to the point where we can’t handle the volume, we need help.” Further, Ascende is constantly on top of emerging industry trends and thinking about new services to offer, or areas of strength where the firm could hone its skills even more soundly, Eagar said.

NEXT: Centralized vs. satellite office control
Certainly, one of the most important questions for a retirement advisory practice that has expanded into two or more teams in different locations is what functions to retain at the home office, what to give the satellite offices leeway to control, and what could possibly be outsourced, noted Michael Clark, a consultant with Keiron Partners and moderator of the panel.

Ascende does not have a hard and fast rule when it comes to the investment lineups, Eagar said. “We give people choices. We provide thought leadership on investments, under the roof of pre-screens. However, we offer advisers choice and allow them to add value.”

At First Eagle, the division of labor among the teams “is practice by practice, firm by firm,” Lee said. “Someone might be focused on compliance, for example. It is all about leveraging and finding the right partner.”

Clark asked the two panelists, when do they know the time is right to add team members. 
Lee said First Eagle studies the service model, to see what takes the most time. Management then ask themselves, is there a better way? he continued. If they decide it makes sense to add to the team, “we look to hire people who have the skills and the desire to do that job—and take the practice to the next level.”

Recently, though, First Eagle has been examining its return on investment (ROI) and has concluded that, rather than hiring new staff members, the practice “can be more efficient by leveraging technology,” Lee said.