Most advisers eat what they kill – to use the mildly offensive jungle metaphor about people who both sell and deliver their services. There’s a long tradition of advisers working by themselves – or perhaps with the back-up of an assistant or paraplanner who cleans up behind them.
Mostly, such advisers do pretty much everything, from attracting the client in the first place, to selling them the proposition, to setting up the financial products and then nurturing the clients and their portfolios.
There are advantages to this pattern of working. I more or less did it myself for nearly 30 years as an adviser. I felt – mostly – in control of my business; the overheads were not too frightening; I got a lot done; and most technical mistakes were basically mine.
But that was at least 20 years ago and it was probably an outdated approach then. It certainly is now. I have talked about this at length with advisers in several businesses of various sizes and specialisms – and it seems clear that the best way for most advisers to work is in teams, pooling work and sharing much of the reward.
Of course, there are exceptions. Some advisers are constitutionally unsuited to working with other people and especially with groups. Such people aren’t team players and they probably never will be, even though they may be exceptionally able advisers. And there are plenty of situations where an adviser is building up a new business on their own and can’t afford to take on colleagues.
But the future for most of us is working in teams. That means having a group of about half a dozen advisers with their administrators and paraplanners who work with the advisers, supporting them and their clients.
Some functions can be done outside the team – strategic management, accounts, compliance, HR, IT and office services, for example – depending on the overall size of the firm. In a larger firm, these departments should be able to supervise or service several teams of advisers and support staff without losing any functionality or effectiveness. In a smaller firm, everyone should all just be one big team.
Advisers should essentially spend their time preparing to see clients, meeting them and keeping them up to date. Lots of advisers still spend too much of their time doing administration; report writing, arranging product purchases and sorting out messes with platforms and providers.
With the average adviser earning £100,000 a year, that’s a really expensive waste of their skills and time. It is work that they should leave to others. Delegating does not just mean better value for money: the paraplanners and admin people who specialise in these jobs probably do them better.
If the paraplanners and administrators work directly with the same advisers all the time, they all get to know each others’ needs, routines, styles and idiosyncrasies. Some larger advice firms have centralised admin and paraplanning/report writing facilities, which might look cheaper to run but perhaps have other drawbacks, such as much less team spirit.
- There are major advantages to advisers and support staff working in teams: If a client falls out with one adviser, another member of the team may be able to rescue the situation and take over looking after them.
- If the advisers work together, they can cover for each other on holiday, in sickness or even when one of them is out of the office.
- A team of advisers allows for diversity: you can have a whole range of people in the team.
Diversity is valuable and there’s not enough in the profession.
Some women clients like to deal with female advisers. Older clients often favour older advisers – although that may not be such a good idea if they want their adviser to outlive them. Younger advisers may relate better to younger clients in terms of culture, experience and expertise. Sadly, social class is still important to some clients and, if you are the same ethnicity as a client, that can sometimes help create a bond.
However, it’s important to remember that, if you go in for team working, remuneration is key to its success.
Rewards need to be spread around the team on the basis of group results rather than individual success. Incentives matter.
Danby Bloch is chairman of Helm Godfrey
You can follow him on Twitter @danbybloch