The 20 Rules for a Successful Study Group
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Study groups are a great tool, allowing advisors to exchange helpful insights – but they can run your business into the ground. For your study group to succeed, you must know what you're getting into, the parameters you want to live by, and how you're going to be sure to get the best of, not the worst of, the experience.
Usually, when an advisor first forays into a study group, all is hunky-dory. Unfortunately, over time, things inevitably go awry. Colleagues who you once respected start providing very poor advice. It can feel like your peers have lost the wisdom that led you to trust their advice in the first place!
The reality is the quality of the people in the group has not dissipated; it’s just that the available flow of new, quality information has diminished. In other words, what is new and exciting when you first begin is no longer exciting when you are digesting it a third and fourth time over. You will learn a lot in your initial meetings. But your meetings will eventually begin to do more damage than good as people “reach” to try and bring new and exciting discussions to the group.
The question is: How will you keep this from happening to your study group?
First, every study group has a specific lifetime of relevance. Once the competitive relevance that prompted its organization has been realized, the study group goes into a tailspin of diminishing returns. Eventually the group reaches a point of irrelevance. This should not be confused with the idea that the participants are irrelevant – it's just that all the valuable information that can legitimately be shared has been shared. This is when the study group becomes most dangerous to your future financial health.
There are variations on this theme, of course, but its remarkable how all of the many study groups I’ve observed have followed this basic path.
Be warned, however, that there are usually a few members who are emotionally attached and desperate to continue with a study group, even after its usefulness has lapsed. They mean well, and try to find numerous ways to infuse relevancy where it does not and cannot exist. While their efforts may be valiant, they are futile, dangerous, expensive and a significant waste of time and energy. Once this begins to occur, many of the members will realize that the study group is unproductive. They are often hesitant to hurt one another’s feelings, however, and may not acknowledge the elephant in the room. Instead, one member after another will slowly come up with alibis for not being able to make study group sessions.
A clear indication that your study group is slipping into irrelevance is when members begin to suggest new rules such as:
- Everyone has to arrive at the next meeting ready to present a new idea.
- Everyone must arrive at the next meeting ready to present a case study.
- Everyone is responsible for finding outside speakers to come address the study group.
- Everyone is required to suggest a new investment idea that could be used by the group.