Building High-Performing Teams: The Difference Between Good and Great

Transcription

1 Building High-Performing Teams: The Difference Between Good and Great Christine Gaze, CIMA, Director of Practice Management TD Ameritrade Institutional This material is designed for an investment professional audience, primarily Registered Investment Advisors (RIAs). TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC/NFA. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank TD Ameritrade IP Company, Inc. All rights reserved. Used with permission.

2 Disclosures TDAmeritrade does not necessarily endorse or support any of the third-party companies, products or services mentioned. TDAmeritrade makes no representations or warranties with respect to the accuracy or completeness of the information provided. Past performance of a security or strategy does not guarantee future results or success. Examples provided for illustrative purposes only. Actual results will vary. Supporting documentation for any claims, comparison, statistics, or other technical data will be supplied upon request.

3 Agenda Building Blocks to Growth The Difference Between Good and Great Insights From Top Advisory Firms Compensation Communication

4 Growth Comes Out on Top Our Study Shows Other Studies Show Business Development Is Primary Focus 1 Top Goals Are Growing: AUM Revenue Profitability 2 1.Source: TD Ameritrade Institutional Practice Management Needs Assessment, Source: Rydex SGI Advisor Benchmarking Research Study, 2011.

5 Building Blocks to Growth Growth Client Experience Technology Efficiency High-Performing Teams

6 Why Do High-Performing Teams Matter? The Difference Between Good and Great Revenue AUM Pre-Tax Income Per Owner Source: Moss Adams/InvestmentNews 2011 Adviser Compensation & Staffing Study.

7 The Evolution of an RIA 547 Clients $1.2B AUM $745K Pretax Income/ Owner AUM 121 Clients $46M AUM $139K Pretax Income/Owner Advisor & Manager & Leader 274 Clients $282M AUM $277K Pretax Income/Owner Strategically led & professionally managed Advisor is Practice >15 People Source: Cerulli Special Quantitative Update: Registered Investment Advisor Market, Moss Adams/InvestmentNews 2010 Financial Performance of Advisory Firms.

8 Best Practices for Building a High-Performing Team As a Practice Grows in Size and Complexity Strategic Direction Setting Formal Management Practices Leading the Team It Will Require Monitoring Focus On Clear Business Vision Performance Ownership Mindset Defined Focus Performance Reviews Team Empowerment Clear Roles Benchmarks Team Communication Plan

9 As a Practice Grows in Size and Complexity Are These Bases Covered In Your Practice?

10 Insights From A Barron s Top Advisor 1 Firm Profile: Financial Network Group, LTD AUM Location Years in Business CEO $1.5 Billion Cincinnati, Ohio 23 Nathan Bachrach The Challenge Sixth sense something was amiss Groundhog day Initial Steps Nathan recruits COO, Martin Murray COO conducts current state assessment Astoundingly committed individuals No idea how to work together 1.Barron s: Top 100 Independent Wealth Advisors 2012.

11 Can I Change the Artwork in the Ladies Room? Client Base Management Client Communication Risk Management Technology Knowledge Manage Expectations Create Manage Maintain Manage Trading Every Employee Issues With Clean DECISION Operations was put to Manual Software Compliance Nathan Team Develop Administration Vendor Training Record Product Knowledge Proposal Generation

12 Decision Capable People Create Leverage Thinking for Them

13 If You Make Every Decision "It s Time to Make the Donuts The Dunkin' Donuts and Baskin-Robbins trademarks, trade names, designs, logos, service marks, and related marks are registered trademarks of DD IP Holder LLC and BR IP Holder LLC, respectively.

14 Learning to Let Go It is EASY to delegate things that are not important to you or that you are not good at It is REALLY HARD to delegate things that are REALLY IMPORTANT to you and you could do yourself. Martin Murray, COO Financial Network Group, Ltd

15 Steps to a Decision-Capable Organization Employees Problems Solutions & Suggestions Selective Escalation Step One Step Two Step Three Martin What do you think? Here are the changes I am going to make. Are you okay with them? Knowing when they need to seek council

16 Decision Capable People Create Leverage I wonder if the Jones kids would benefit from that personal finance basics presentation Paul did last week? Our biggest client is coming in next week I wonder if we could tee up a discussion around their children? Source: Financial Network Group. Growth in Three Years How Can I Add Value?

17 It Comes Down to Leadership AUM Location Years in Business Firm Profile: McKinley Carter Wealth Services President & Managing Director Firm Structure $550M Wheeling, WV 16 David McKinley 3 Senior Advisors, 7 Advisors 2 Specialists, 4 Client Coordinators The Challenge Hard to Wear All of the Hats... Advisor Manager Leader Initial Steps David Conducts Self-Assessment Who am I? What is the most valuable role I can play? Am I willing to own the process? Do I want to take the time to train, teach and monitor? Am I willing to acquire a different set of skills?

18 Clear Vision + Defined Focus = Results Results Advisor Manager Leader $1.3B Personal Wealth $800M Qualified Plans $300M Philanthropic Assets Goal: $2.4B BHAG Overhaul of Technology New Short & Long-Term Compensation Plan McKinley Carter University David s Strategic Vision BHAG $2.4B $550M $500M 2010 Current 2020

19 "I believe the real difference between success and failure in a corporation can be very often traced to the question of how well the organization brings out the great energies and talents of its people. Thomas J. Watson, Jr. (Founder of IBM)

20 Creating an Ownership Mindset Within Your Team Formulaic Payout 100% Goal 10% Payout 120% Goal 15% Payout AUM $350M $375M $300M Share of business Care about business Share in results Flat Bonus Goal Achieved $5,000 Goal Not Achieved $0 Care about specific goal Start Goal Result $125K Expenses $115K $105K Start Goal Result Charts for illustrative purposes only.

21 Successful Firms Build High-Performing Teams Top-Performing Firms: 20lbs Overhead Expenses 20lbs Lower Overhead 1 100lbs 100lbs Lower Headcount 1 Overhead Expenses More Productivity 2 1. Managing Growth and Profitability TD Ameritrade Institutional Moss Adams/InvestmentNews 2010 Financial Performance of Advisory Firms.

22 Empowerment Through Engagement Engagement Projects That Can Add Value Empowerment Sample Projects: Develop Social Media Policy and Plan Write Employee Manual Document Job Descriptions Create Performance Review Process Revise CRM Workflows Conduct Review of Local Competition Organize Client Appreciation Event Plan Team Offsite

23 How Do You Communicate as a Team? Is It Working? How Do You Communicate as a Team?

24 Best Practices in Team Communication Do you have Annual Off-Site Strategy Sessions Quarterly Strategy Reviews Monthly Leadership Meetings Weekly Team Meetings Daily Huddles And, how effective are they?

25

26 Annual Strategy Session Insights From Donaldson Capital Pre-Meeting Meeting Operating Committee Meeting: Professional facilitator 7 Deadly Sins Discuss and plan offsite Everyone engaged Define meeting Think owner Leader Delivers it Ink Monologue Big over-arching it Do questions: it! Create formal agenda No Plan Plan How to maintain team Prepare financial and Onsite business Interuptus communication in their growing metrics Day-to-Day Issues organization? Becomes Gripe Session What is the best organization design to support growth? No Agreed Upon Action Steps Discuss Annual Client Satisfaction No Follow-up Survey Review and discuss business goals

27 Sample Annual Meeting Calendar Key Annual Off-Site Strategy Session Monthly Leadership Meetings Quarterly Strategy Reviews Weekly Team Meetings *Daily Huddles

28 Ideas for Action Assess the Current State Consider self-assessment tools such as DISC or MBTI Leverage TD Ameritrade s Practice Assessment Tool Set Your Direction Formalize Business Management Instill Ownership Mindset Foster Team Communication Set your business vision and define areas of focus Clearly define roles and responsibilities Is it time for a COO? Who can run the business of the business? Identify ways to engage team in building value Align compensation with firm goals Review current plan Engage team to build new plan

29 TD Ameritrade Building High-Performing Teams Practice Management Insights Developing a Compensation Strategy Research Trends Best Practices Assess Design Build Lead Guidebooks Job Descriptions Interview Questions Sample Organizational Charts Modular Tools Junior Advisor Question Bank Org Charts Rethinking Your Compensation Plan Shape Up or Ship Out: How to Reform or Fire Poor Performers Drive Engagement Through Team Communications Save Yourself the Cost of a Bad Hire Webcast Series

30 TD Ameritrade Resources Rethinking Your Compensation Plan to Support the Bottom Line Practice Management Insights: Building High Performing Teams Thursday, December 6, :00-5:00 pm ET This webcast will: Highlight trends related to increasing salaries, new incentive opportunities, benefit packages and ownership opportunities Present a compensation makeover case study of an advisory firm Provide actionable tips on how to develop the right compensation plan to drive results at your firm Christine Gaze, CIMA Director TD Ameritrade Kelli Cruz Director IN Advisor Solutions Developing a Compensation Strategy White Paper

31 Questions?

32 Thank You Christine Gaze, CIMA Director of Practice Management Phone:

33 Appendix: InvestmentNews/Moss Adams Study Methodologies 2010 InvestmentNews/Moss Adams Financial Performance Study of Advisory Firms: InvestmentNews/Moss Adams defines topperforming firms as the top 25% of firms surveyed based on a composite ranking of the following criteria 2009 earnings before owners compensation (EBOC) as a percentage of revenue, compound annual growth rate (CAGR) of revenue, and 2009 revenue per staff (total headcount) InvestmentNews/ Moss Adams Adviser Compensation and Staffing Study: Top human capital firms were required to meet nine of the following eleven criteria: 1. An average effectiveness score of 3.5 out of 5 on fourteen employee retention factors 2. Top quartile for revenue/staff 3. Clearly defined individual goals and objectives 4. Clearly defined firm goals and objectives 5. Documented job descriptions for all employees 6. Employee awareness of job descriptions, roles, and responsibilities 7. Defined career paths and organizational structure for employees 8. Employee awareness of career opportunities and organizational structure 9. Formal training program in place to train and educate staff 10.Employee performance evaluations 11.Very or somewhat effective performance reviews Source: 2010 InvestmentNews/Moss Adams Financial Performance Study of Advisory Firms Note: InvestmentNews/Moss Adams defines top-performing firms as the top 25% of firms surveyed based on a composite ranking of the following criteria 2009 earnings before owners compensation (EBOC) as a percentage of revenue, compound annual growth rate (CAGR) of revenue, and 2009 revenue per staff (total headcount).

34 Why Do High-Performing Teams Matter? Revenue In Millions 78% $2.0M AUM In Millions 54% $220.0M Pre-Tax Owner Income In Thousands 49% $350.1K $1.1M $142.5M $235.7K Source: Moss Adams/InvestmentNews 2011 Adviser Compensation & Staffing Study.