Executive Summary
Although many advisory firms start out with a single person handling all the work of advising clients, bringing in new business, and managing operations and compliance, there's a limit to how many hours any one person can work, which also means that there's a cap on the amount of client growth a solo advisor can achieve before running up against their capacity limit. The obvious answer to growing beyond the capacity of a single owner/advisor is to build a team of employees (either in advisory and/or other roles like client service or operations) that can accommodate additional room for growth. And yet, not all teams are created equal: While some team members complement each other well enough to facilitate more clients and revenue, others can be problematic to the extent that the firm owner has less time to advise clients because of the additional managerial burden that a poorly functioning team creates.
In this 'hybrid' video-based article, Michael Kitces and John Bowen, CEO and founder of CEG Worldwide and CEG Insights, dive into the data on what makes advisory teams work, how strong teams can help firms attract high-net-worth clients, and how a team-based approach – despite the higher complexity and managerial duties involved – can actually improve the wellbeing of advisors who are stressed beyond their capacity on their own.
Good teams are valuable not just from a productivity standpoint (as they allow the firm to serve more clients); they can also be an asset when it comes to developing new business and attracting high-net-worth clients. Because from the client's perspective, a firm with multiple people working together can be reassuring; they are able to rely on faster responses, more efficient service, and someone who will be available to answer their call when the lead advisor goes on vacation.
But as the firm grows (both in terms of clients and employees), it becomes less about the number of people on the team and more about having the right people in the right roles. Because even though a firm with high revenue might be able to sustain some turnover and loss of revenue due to a team that doesn't work well together, continuous team dysfunction can eventually compromise advisor wellbeing, which can ultimately impact capacity at the revenue level. As while any team can expand a firm's capacity and bring in more revenue, it takes a high-functioning "Dream Team" to both expand capacity and improve everyone's enjoyment of actually working in the business.
In many respects, the ideal team is composed of people who will self-manage themselves without requiring extra involvement from the firm owner. But it isn't enough simply to find self-motivated people: There needs to be a clear vision for the company, communicated during the hiring process and reinforced regularly, that emphasizes not only the values and significance of the business today but also where it's going in the future, to ensure that everyone is working towards the same goal (and to make clear the opportunities that await employees who stick around).
The key point is that advisory firms of different sizes, business models, and growth plans all encounter the same pain points that come with building a team. And even for more seasoned entrepreneurs, the challenges around building a team that can work well together never really stop – they just take on different (and often more complex) forms. Nevertheless, for advisor-owners who can communicate a clear vision of their company's direction (and what that means for employees coming along on that journey), it's possible to build teams that work together to grow the firm – not only in terms of clients and revenue but also in terms of happiness and wellbeing, as everyone recognizes the meaning and significance of what they're building together!
Show Notes
- CEG Insight's The Dream Team Effect Slides – Download (PDF)
- CEG Insight's The Dream Team Effect Report
Full Transcript:
Michael: Welcome, John Bowen.
John: Michael, great to come back and be able to share some new insights from CEG and really help your listeners and viewers be even more successful in serving their clients.
Michael: Amen. I appreciate you joining us. This is now our kind of third in the series, as it were, around some of the research that you guys are doing at CEG research, because of course, I love all things research and numbers and data, and then pouring in to figure out what we get to do with it. And so, we've done some prior episodes around serving high net worth clients and serving entrepreneurs and business owners in particular. And so, I'm excited today, I feel like we're shifting tracks a little bit from sort of outward who we're serving to inward how we're serving them and talking about teams and teaming up, which I feel like has become, and all of us in industry, mantras. The answer to anything and everything growth, if you're not sure where to go, is teams. It's teams everywhere. Teams, teams, teams. But in practice, not all teams are made equally. Not all teams run equally well. Some frankly do a lot better than others. And so, I know you guys have been doing some work recently around specifically teams and how they run well in advisory firms. I think what you guys called the dream team effect of what happens when you get teams that are operating really well together. So I'm looking forward just diving in today and getting to nerd out a bit on teams and best practices around teams.
John: It's so important, Michael. Both you and I like being nerds on occasion. We can kind of go both ways on these things, but data, we like. And I'm big, as you are, on let's do empirical research to understand what's out there. But at the same time, let's look at real-world experience. We call applied experience, one, you get to work with thousands of advisors, we do too at CEG, and what's really working. And one of the things that's been loud and clear to advisors, and I'm not going to go do the corporate side with the teaming, we'll come back to that, is that as we start, I got into the industry. I was an advisor. I wanted to do a really good job for clients. I wanted to serve them. I wanted to make a difference. We call it today, I want to help them build an amazing life of significance, take care of the people they love, causes they care about and make a difference in the world. Nobody taught me leadership. I was a naval officer. I was in the pilot program, but they didn't teach that much leadership there either. And so, the idea is I was pretty dysfunctional in the beginning. But I didn't have a choice. I had to bring people together to because I couldn't do it all on my own. And I've looked to see who coined this phrase, accidental CEO. I want to give attribution, but I couldn't find it. But I think almost all of us, as financial advisors, became accidental CEOs. Nobody woke up with the idea that I want to have a whole bunch of people working with me. I want to deliver great financial experience. Now some of the corporate side have thought, well, these are more likely to stay at our firms if we have teams. And so, and oftentimes, more on the wirehouse side, that they gave the incentives on compensation. If you teamed up, you made more money, which they were only teams and namesake. They were silos. So there's an opportunity when you do it right, it changes everybody's life. When you do it wrong, it's the worst thing in the world. You hate your life. You and I are big on let's do things right. Be successful on purpose.
Benefits Of A Team: Scaling, Efficiency, And Better Client Services [04:00]
Michael: So I know we're going to dive more in a few minutes into literally, different types of team structures and how they're operating. But I feel compelled because we both love our research and numbers and data. From your research and where does teaming show up in terms of what are the benefits? Why are we actually doing this and going through teams? I feel like the industry sort of generically says, "You should team." But why? Why? It's so obvious the answer is there without saying it, for a lot of us. That's the implication. But what do you actually see in the data around benefits of teaming?
John: So when we do the research on what clients want, they want advice beyond simply investing. They actually don't believe any one person can deliver everything. And when we look at it from asking teams, and this is a study of 899 very successful financial advisors, and we ask them about client retention and service through a team base. What do they give credit to the team for? And nearly 50%, 49.8% said, "Hey, from client service, this is a big deal." And I was an advisor. Michael, were you ever an advisor? I don't know that.
Michael: Yes. Yes, I spent a lot of time on that.
John: Yeah. You were an advisor too. The power of sitting across the desk and then having a great teammate do it, clients love that.
Michael: Yeah. I found over the years, 2 big things that crop up just very practically of advisors feel better about teaming from the client service end. There's sort of the proverbial someone else can answer the phone. Just so there's a continuity of service to clients that even if I'm on vacation or I'm just literally in with another client, someone can answer the phone. Someone can give service to the client. It's not all on my shoulders. And the truth is, I literally get busy. I can't serve all the people, all the time. When my team is bigger, my clients get more faster, better responses. The second that I find that it being so many of us, we come to this because we want to help clients, make sure we do nothing wrong and then we get really stuck in our head sometimes. I say this as being guilty of it myself. I got to analyze every possible thing because I don't want to make a mistake and get something wrong and miss something for other clients. And there is just a sheer power of having someone else on the team to talk through clients, to bounce ideas off of, to be able to say, "I think I got everything. Why don't you also take a look at their stuff and make sure I got everything, and together we will make sure that we get everything." And I think it gets back to your comment that look, most clients, at the end of the day, they don't really believe we know everything about everyone. So often, clients have some comfort in seeing that we've got a team. I think for a lot of us, deep down, we're quite clear we don't literally know everything about everyone. And so, another team member that's another set of eyes on a client situation just feels like more likely we'll give them better advice. Not that I was giving bad advice before, but more heads in the room probably means more and better advice, which shows up in client retention.
John: And I would give a third thing too. You have unique abilities. I have unique abilities. We're pretty good. We're entrepreneurs. We're good at a lot of things. But we employ people who are better than us at a lot of things. I think for me, the detail of project management is not something I'm good at. And this is why we put teams together. And we go back to the research. When we talked about client service and retention, there was almost nothing negative at all. And that was among people that had bad teams too from a client service experience.
Michael: It might be hard to manage them and stressful on me, but I can still acknowledge clients are getting better service.
John: You have a team so you can scale up. Whether you want to be a lifestyle boutique or you want to build a national enterprise, you can't do it on your own. I don't care. Even with AI, you can't do it on your own.
Michael: There's always something that is the least valuable thing for you to be doing on the scale of all the things that you do. That would probably be more cost effective to let someone else to do that so you can spend time doing something else. I feel like the quintessential example, going all the way back. I started in the insurance world. You hired someone as quickly as possible, because you were supposed to hire an admin assistant so that he or she could do all the paperwork, so you could be out in the field selling more. So we don't quite do it that way anymore. We expand our teams for different reasons. But I feel like there's always been this underlying, at least particularly as a firm owner or a founder or leader of the business, one of the reasons you expand the team is so that you can delegate and free up more time so you can get more clients and grow the business. You free your capacity to go grow further.
John: You should grow to whatever your highest unique ability is that you enjoy doing. And usually it's not filling out paperwork, for most entrepreneurs, most entrepreneurial financial advisors along the way.
Teams Rated "Critical" For Business Development [09:33]
Michael: So do you see this in your data, this growth tail wind? Does it actually show up that way?
John: Yeah, let's talk about it. So when we talk about the positive impacts of team, 44%, the teams are critical for attracting high-net-worth clients. And this is what we were talking about, that they don't believe you can do everything on your own and you can't. And as we look at the services we're delivering, we need teammates, both internally and externally through strategic partnerships. And the more functional we can be, the more powerful that is. And then, when we look at the strong impact, 85.7% rate their teams as really, this is critical on business development. Because I can still remember some of my largest clients I picked up wanted a tour of our office, and for me to explain to them what everyone did, this is back before the old days before video.
Michael: So you actually had an office that people walked through.
John: Yeah, a real office with everybody coming to every day.
Michael: I do find it fascinating. One of the things that we've seen in some of the research that we do on our end as well, we do a biannual productivity study around advisors and the types of clients they're working with. And there is, to me, it's been a shockingly consistent and direct correlation, simply the larger the firm, the larger the average client. It's like a straight line up that the bigger the firm gets, the more affluent the clientele they seem to be able to attract. And I think part of that gets back to exactly what you're showing here, just the firm gets bigger, the team gets bigger kind of by definition, because if there's more revenue, you need more people to provide the services. But bigger firm, bigger teams. Bigger teams, bigger clients.
John: Yeah, I think I haven't studied that for a correlation, you have, and I'm not shocked at all by any means. And I do see that there is an opportunity that we all have is to get unique skills. This is one of the powers of diversity, not so much from a classic DEI type thing, but meritocracy of getting the best ideas. And I do want to show, I know some who are listening, we'll talk about how you can get this, I'm flashing charts, you'll be able to download.
Michael: We'll have a download at the end if you want to see the chart, and not just hear the chart. But for those who are watching on YouTube, you can see the charts.
Unhappy Advisors And High Turnover In Sizeable Teams [12:20]
John: And we also have a study that we haven't even published, Michael, the dream team effect. This is kind of a summary for financial advisors. And we're talking about a lot of the positives, but I want to also talk about this is why you want to do it really well. I'm putting up an example of loss of clients due to team members action. 42% felt they had a significant loss of AUM because of a team member. 39% loss of revenue. Significant. And then, the thing that probably was most surprising to me was the turnover. Almost 10% have 30% annual turnover. 36.3% have over 20% to 30%. It's just so high. And one of the things, and what made me think of it, is you would have thought, well, the highest producing revenue ones would have the lowest turnover. No. And because they have the money, they're willing to put up with this. And I'm just going, "This is so unnecessary. Let's do it right from the beginning."
Michael: We saw a version of that with one of the wellbeing studies we did a few years ago. We look at advisors and how they evaluate their own wellbeing, self wellbeing, how are you feeling about this advisory firm, this practice or business that you're running. And then, we cross-section it against lots of different advisor demographics and data. And one of the most surprising things we found was this really acute point, the unhappiest advisors had $225 million under management. This big cluster that showed up right at 225...
John: The ceiling of complexity at that point, hated their lives but were making…
Michael: Yeah. I've never made more money and I've never worked more hours and I've never felt worse. I have all these people and somehow I work more hours than when I didn't have these people. And it was because they all had grown to this point of 6- to 8-person teams, because that's about how many you could afford by the time you're at 200 plus million of assets and 1.5 to 2 million of revenue. and they had these sizable teams and the teams were not working well and they were spending a zillion hours managing their team and still their 172 clients. And at that point, you're working 2 jobs and it doesn't feel good.
Building A Team For Transitioning Out Of Your Practice [14:55]
John: And I want to show one other example and it goes to what you're talking about, and this was a big surprise, is that when we look at timeframe for transitioning out of your practice, 10%, 1 to 2 years. 33.4%, 3 to 5 years. That means 43% of the advisors, and these weren't all baby boomers, by any means, are thinking of transitioning out over the next 5 years. Okay. Couple things going on. One, presumably you're going to sell your business. You want to have the most value. But second, what if we made the business fun again? I really enjoyed coming to work. Maybe you might want to stay and create more value, more impact for clients, all that that's amazing and so on.
Michael: Yeah. I've long seen a phenomenon where advisors get told, if you want to have your business be more valuable and transferable, you need to build a team that can do all the things that you do so that it's transferable when you leave and retire. And they go and start building the teams to do that, it works, and they're like, "Well, now I don't want to retire." I'm actually enjoying it again because I finally got all the stuff off my plate.
John: Yeah. I love my business. I've got multiple businesses. I've got a great team. And I look forward every day to coming in. I get to work with really talented individuals like yourself. We get to have these kind of conversations. We're making a big impact. We're working with so many clients. Why would I leave? You might take different roles and all that. But this is the beauty of financial advice. You can design this for whatever your needs are. Excuse me. And at the same time, if you want to sell, having a fully functional team is amazing and particularly if you also want to acquire. When you put 2 dysfunctional teams together...
Michael: You get a bigger dysfunctional team.
John: ...it's a disaster. Yeah. I used to have an M&A group that one of the biggest engagement series we had was unwinding deals that didn't work type thing. And those are painful.
Michael: So I feel like we talked about this spectrum, right. Teams seem to be good. Client satisfaction, growth capability, attracting clients. There's even a whole succession angle, which is a discussion to itself. Maybe we'll do that for a future episode. But then, we also acknowledge not all teams are getting this level of success. We've got teams that are blowing up to the upside in a good way, and then really unhappy advisors leading teams. So how do you think about these stages of advisor teams as they develop?
John: I'll give an example. I had a call late last week from an advisor. He just left me a voice mail. Hey, John. Thank you. I just sold my business for $40 million. And you might remember we met 3 years ago and I hated my life. And I was thinking of just turning the keys over to my employees, maybe get a little money. He ended up coming to our coaching program. And the difference is I ended up contacting him the next day and he told me, "I sold it but I'm sticking around." He just sold it so he didn't have to deal with the parts that he didn't want, but he had built a dream team. And the difference in his life now, the guy was giddy. I'm hoping a year from now, he's giddy still too because sometimes doing the deal with private equity, it's not always as giddy the second time. But at the same time, what an opportunity. Probably his practice was worth a few million dollars. That short period of being focused was really amazing. And what he did is he worked up what we call the hierarchy. Actually let's put this up here. Think of it as a hierarchy of team performance. And most of us, when we're the accidental CEO, when we start, we don't know anything at all and it's pretty chaotic. And there's a lot of fear.
The Evolutionary Hierarchy Of Team Development From Dysfunctional To High-Performance To Dream Team [19:16]
Michael: I have people. They do things. We all kind of get the things done maybe sort of.
John: Maybe not too. There's a lot of yelling going on. There's late nights. Nobody's happy. A lot of turnover. You think you write a check, that's enough. In today's world, people want autonomy, all the other things that go on. And then, probably what, Michael, you, and people move fairly quickly up type thing to once they get going and making money, which our industry is great at, is a lot of high-performance individuals. And we're kind of co-existing. We've put up with each other. We'll work a bit and so on. Then the consultants come in. Somebody takes some leadership courses. We start getting toward the high-performance team. And that's collaboration. And what we found when we're studying that for most advisors, if they get to that level, that's what we call the "ceiling of good enough". What happens is there's a higher level. Now there's only 8.1% of advisors in this study that said they hit this level, where each of the team members are committed to each other's success. And we use the term co-elevation to do that. Once you're on the team, I'm going to help you be even more successful. And it was at that point, the quality of life, the building that amazing life of significance for clients, teammates and for the owners, the principles, the advisors, it really took off. And so, one of the things that, I want to share this research with your audience so that you want to get there as quick as possible type thing.
Michael: So then, now I feel… I think you said 8.1% are in the top tier. Do you have numbers for all? Where do we fall? Where do we fall across these?
John: Again, remember this is self-determined. If I ask team members, it might be different too. But when we talked about from the standpoint, high performing individuals...
Michael: That's our plurality, almost 43% are, yeah, I got some good people on my team. I got some good people on my team.
John: A third were working collaboratively. Only 14% said they're dysfunctional. Again, if I asked other team members, I'm pretty sure that number would jump up a lot type thing.
Michael: Oh, so you think some high-performing individuals, the owner believes they have high-performing individuals and the high-performing individuals say things are kind of messed up around here.
John: Yeah. I can tell you that from research too that this project, others...I did due diligence when we were acquiring firms in another company. We did 120 due diligences. And this is something everybody should know if you're selling your business. One of the simplest due diligence items you do is you get key team members individually asking them about the company. And they're concerned about their job, the positioning, they may or may not have some equity. The story, oftentimes it's not even close to what the principals are. They're working at a different company. So you really get to see what's going on. One of the things you want to do, and a big part of having a dream team, is having a clear vision that we're all marching to, that we know what we want to create together along the way. And that's where enroll people in that vision and they want to co-elevate everyone to have success in getting there. And that's where the power is on this. And going back to the data, that was the 8.1% and 2.4% weren't sure where they were.
Michael: So part of me is kind of fascinated at the dream team level, but I also look at this data and say, "Okay, but more than 50% of us are still really in the bottom. We're dysfunctional or we're in high-performing individuals, some of which may still actually be dysfunctional. We just don't realize that that's what our individuals would say." So how do we start moving up the line if we're still fairly low on this pyramid? I think for a lot of us, the most painful point's at the bottom, how do we start moving up?
John: This is something you and I both hate about research is when you just get a lot of research, okay, there's a problem. Well, thank you.
Michael: We've definitely identified the problem. We have clear data to validate it.
The Dream Team Framework To Motivate, Engage, And Execute [24:17]
John: So then, we want to have a framework and so much of the time, people just shoot out, do this, do that and so on. And one of the things here at CEG, we do is we want everything to have a framework. And so, we have applying the dreamwork framework. There's 3 levers, 9 accelerators, some cores. And let me just put it on, I'm going to put it on a slide I can draw on. The big thing that we want is unequaled performance certainty. That's what gets all of us excited. I want to know every day that things are working and clients, almost every day I get at least one thank you note from a coaching client, a corporate client. And I know you do the same thing. I love that. We're making a difference. Then how do we get there? Well, we got to get momentum in the business so it's moving there. You and I, before we turned on the camera, were joking about overnight successes. Takes a little while to get momentum. We got to build a strong foundation. We actually got to get the results. So we call this the heart of the team. And then, what we identified, there's 3 levers. The very first is you've got to motivate people to move from self interest, because we all have self interest, to enlightened self interest. And what this is, Michael, is what you're doing is you go ahead and if you think about 2 circles, you and I working together, when we explore working together, we both have our self interests for our firms. We put it together. There's an alignment in the middle. And we want to find that with all our teammates so that they're on a journey. They want to go on this journey together. The second lever is engaged. And we want to move from managed to self-responsibility. Sometimes I'll call it self-managed. I don't want to be a manager. Okay being a leader. I want to point the direction. But I want my companies that I own to be self-managed. So many of the advisors, when they hear that's a possibility, that's what I want too. That's what we all want. When we're accidental CEOs, I want you to embrace being an accidental CEO. You didn't sign up. You want to bring on people that are working with you to do that. And then, the last lever is this execute. One of the biggest problems of our industry is you can strategically stumble and be very successful. And it's just the profit margins as such we want to be seamless.
Michael: You can get the business in, the revenue is very forgiving of many management sins for a long time.
John: We can think we're very successful because how can we not be? The marketplace is rewarding us financially. We may have 30% turnover or more, but we're being rewarded and it's like, no, you want to build. I'm concerned about profitability, but I'm more concerned about building an amazing life of significance. The last incremental dollar doesn't count that much. Having a great quality of life makes a big difference. And these are the levers for not only the principals, but for all team members. And then, without going into too much detail, we have each of these are the what we call the drivers. These are the 9 accelerators that drive this. And let me put it up in a slide here, I think it'll be easier to follow, are each of the 9 accelerators, Michael. And we can go over them individually but I want your thoughts on kind of the big picture. This is again, okay, if we want to have a dream team, we want to be successful on purpose, so this gives a framework on how you can do it. And we see it being done repeatedly, time and time again.
Michael: So I'll say the core to me certainly very much speaks to me, just having built and scaled through a number of businesses over the years, just that core, you build a foundation. You do some stuff. It gets results and people are served well. They tell some others. It creates some positive momentum which lets you reinvest into the business and expand what you're doing and deliver more, which serves more. That fly wheel starts turning, right, as we joked to before. When you do that repeatedly for a whole bunch of years, and then 10 years of steady repetition, you're an overnight success and you hit that point. So I certainly get that central fly wheel. I feel like the struggle for most of us in practice, as you noted, I don't really know anyone out there who doesn't say a self-managed business sounds awesome. And everybody manages themselves...
John: I don't think there is anyone.
Michael: Everyone managing themselves and having a more enlightened, aligned self-interest and operating seamlessly. That all sounds awesome. But that's not magically occurring in my business despite my clear desire for it. There's some execution gap, I guess, in the context to your model. There's an execution gap at how we get there. So I think what I'm wondering, for the time we have left, can you give us some examples into literally what are we not doing? Because we're all aligned about what it would look like if it was operating awesome, only 8% of us apparently are there. So what are we not doing? What behaviors are blocking us from getting there? What are some examples of what we got to actually change to get there?
9 Accelerators For Dream Teams To Drive Success [30:28]
John: So when we look around the model, these are the 9 accelerators and I've listed them here, when we get to, I'm going to give you, Michael and I are going to give you a QR code and a link to download the study, it has everything that we've talked about and more. But it'll go step by step high level for each of these 9. But let's just touch on a few of them, Michael. We think of leading, the way we think of it, remember only 8.1% said they felt that everybody has a shared objective. So we want to promote a co-elevation culture. So one of the things we want to do is we want to create a vision of where do we want to take the firm over the next 3 years. One of the mistakes so many leaders do is they don't tell people where they're taking them. And it's kind of hard to have a buy-in when you don't know where you're going. So a big part of leadership is having something compelling.
One of the things I love, we have a vivid vision. Cameron Herald, he's a coach of CEOs, famous. He has a book called "Vivid Vision" and he's a good friend. And we do it. I update it regularly. And I got to tell you, not only does it, my whole team keeps me on track to realize the vision, which I love, but yesterday, a very high level person became available. I shared the vivid vision and I'm pretty sure they're going to join our team. Okay. You have to have that. I have in the study what percentage or higher. I think it's 80% are going to hire somebody over the next year. Why would they want to work with you? They have choices. What are you building? And to me, we're building a great business where we're going to help advisors build amazing lives of significance and they're going to do it for their clients. We're going to touch millions of lives by collectively what we do and we're going to change the world. Okay. That, for a lot of people, is fairly exciting. If it's not exciting, you shouldn't be here type thing. But you've got to deal with that leadership very first thing.
Michael: And I will highlight, this is something I feel like I came full circle on over the years of my career that early on, these discussions of vision and mission and core values, I kind of felt was neat things to put on pieces of paper, maybe paint the values on the wall, and then everybody goes on about their day doing whatever it was they were doing in the first place. It never connected. And then, as I started building businesses and going through that same path of trying to hire and attract great people, it suddenly really hit home to me of I really have to paint a picture of where this is going. If I want them to get on this bus, I have to show them the bus is going somewhere cool. Or they're just not going to choose to get on this bus. And to me, it really drove me to say, "I got to get this out of my head onto paper of where we're really going or they don't see...I know what a good opportunity is. They don't see it. They don't get it if I have not painted that picture."
John: And why would they? You've been living this for a long time. I've been living it a long time. And we do. And we can make this link available to everybody. It's a vivid vision. And it shows exactly what we're going to do between, I did it 2 years ago, so we update usually about every 2 to 3 years. It's by December 31st, 2025 what we're going to do, how we're going to do it, our core value, our culture, our senior team, the teams that we have at our company, the core business activities. I had written this before I acquired the research firm that we did, Spectrem, and this box here had that we were going to acquire a research firm. And these are 2 new businesses that were just beginning now type thing. And how we do everything. And we make this all publicly available because this is our commitment, what we're doing. And if we're not aligned, you shouldn't work with us. Whether as a client, whether a strategic partner or whether as a teammate in one of our companies.
Michael: So what else? Maybe 1 or 2 others with the time that we've got left.
John: I'm just going to going order, I think, and I'm actually I'll jump...why don't we do promise and cadence to finish this up, because the promise, one of the things, 90% say that if they have a team and they're making a good offer, it's really powerful. The problem is so often we tell our team kind of a grind. And let me give you, Michael, this is the way we think of it, is kind of 4 Ds. Many of the advisors, if I'm sitting...I'll give the example. I'm sitting at a restaurant and I'll have some rich entrepreneur, I live in Silicon Valley, we're going out to dinner. And he goes, "John, what do you do?" And I say what I do. And he says, "Why would the advisors you're working with be different?" I've used this example. And I'd say, "There's too many advisors that just disappoint out there. And I don't want to beat anybody up, but they don't do what they say they're going to do. Bottom line. And of course, you don't want to work with anyone like that." And the next group is a group that basically deliver what they say. And this is all great and so on. But the reality is, you actually should, at a minimum, deliver what you say. And then there's another group that really delights and they typically have worked with some consultants or coaches and they're doing some type of value added over and above. They deliver what they said and they do it. I go, "You know what? We changed the game. Our advisors that we have the privilege to work with, defend. They act as advocates for the clients. They're delivering." And then, I share, there's 5 things that they deliver. They help make smart decisions about your money. They mitigate taxes. They take care of the errors. They protect the assets from being unjustly taken. And they are to the extent you're charitable, magnify them. So when we go back and we think, okay, the promise, the promise is 2 parts. One to the clients, what's the value promise. Because people want to work with somebody that's making a difference. What are you bringing to the community to your clients? And at the same time, is it compelling for that individual? If you can clearly articulate it, it's really powerful. If you're an advocate, and Michael, I know that you're a big advocate, I am too. This is something we're both passionate about, probably even more than research. But the idea is, helping people make smart decisions. Health is more important, but money's a close second type thing. And the difference you can make in people's life is huge. If you can let your team know that you're bringing tremendous value, that's where it really takes off too.
Michael: And then, tell us a little bit about cadence with the few moments we have left.
John: The cadence part is one that for the most part, we don't think about. When I see such a high number having 20% turnover, the idea is I don't want to leave anything for chance. You're a very creative guy, innovative guy. You got a lot going on. Okay? It's very easy, I do too. I got multiple businesses. We both do. It's easy to drop things. It's easy to have team members not even know what we're doing. So one of the things we want to do is create a cadence where we're sharing insights. So every day, I have a daily huddle with effectively my COO, is the managing principal of operations across all our businesses, and my executive assistant. They can be anywhere from 5 minutes to half an hour, anything going on. We have our weekly different team meetings. I participate only in 2 of them. I'm trying to get out of as much as I can other than the steering part. And we have our townhall meetings. We have all these different things that we do, so everybody knows there's a cadence for the information getting out as well as the feedback coming back. And what it does is it makes everyone heard and quite honestly, I doubt our turnover's over 2% type thing. It's never been above single digit and it's always very seldom lose anybody at all during the course one a year. Why? Because they are part of that dream team and they feel really good about it. There are many of the advisors we have the privilege of coaching doing that too. But you can't just leave this stuff to chance. I remember the first time, Michael, I heard about a daily huddle. I go, there's no way I want to get together daily with anyone. I don't even want to get together daily with my self type...
Michael: I was going to say, boil that down maybe just because you're living the end stage of this, having grown and scaled it. So if you go back to our typical advisory even building out a team, probably somewhere between 2 and 6 people, that's most of us with a team ecosystem around us. So in that traditional advisor team environment, what would a...
John: You would have a weekly senior team meeting. You would have a daily meeting scheduled with your executive assistant. You may or may not have, depending on who's doing the operational stuff, an operational meeting would be ideally weekly. You would have a monthly all hands on deck meeting, a townhall type meeting. You would have a quarterly strategy session, at least a day, ideally off-site, if you're in a real office with everybody around type thing. And depending on your skillset, that may or may not, you should have an outside facilitator do that one. And you're going to be measuring that against a vivid vision that you are going...the other thing would be a monthly minimum financial meeting where you have the red, yellow, green for all your key indicators. And that you make sure you're on track.
Michael: Very cool.
John: And that's really with probably 3 or 4 people, you should schedule that stuff even there at that level.
Michael: So as we wrap up, just for folks that if they want to go deeper, because there's more to this than we got into. We covered 3 of our 9 accelerators and some of the applications. So where do folks go if they want to dig into this further?
John: So if you are on YouTube, you can just take a screenshot of the QR code and download The Dream Team Effect. It'll take you to a landing page. Let me see if I have it here. Landing page with a short video, some information and it'll give you the benefits of the report, all that stuff. Just grab that PDF, not the flipping book version, so that you can download it and share it with your team. Also for those of you who are, I don't know, audio, how you do QR, so I'm going to give you the UR link. it's www.cegwin.com/kitces-teams. And you can download this. And if you want to learn more, there's links that you can find out more at CEG.
This is a journey that's so important. I was on a ski trip when I got the research, Michael, and I shared 2 numbers. This was raw data. I'm going, "Guys, what do you think?" 16 mostly in the 40, 50-ish range skiers, all financial advisors, all successful. And I go, "What do you think? 8.1% said that they had teams that they were proud of and 43% were thinking of leaving the industry in the next 5 years." And they all looked at me and they said, "I got a lot of company" type thing. I've heard them say they're different. This is something we all struggle. Anybody who tells you they figured it out, leadership and team, is not telling you the truth. But I do want to promise you, and Michael, you said I'm kind of more at an end state. The reality is I've had multiple businesses along the way. I've sold some for a fair amount of money. The earlier businesses, I owe so many apology letters to former companies. When you get this, it's so worthwhile. And when's the best time to start on this? Now.
Michael: Awesome. Well, thank you, John. Thank you for joining us. Appreciate the conversation.
John: Always a pleasure, Michael. And looking forward to our next visit and sharing even more empirical research, applied experience so everyone can do even better. Their clients, future clients are all counting on them, so we don't want to let them down.
Michael: Amen. Amen.
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