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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
Dear Readers,
In columns each month, I am addressing considerations specifically related to transitioning your advisory firm or team. This week’s column will explore the impact on team members and how to navigate a successful transition when your team has become like family and they care deeply about keeping the status quo in place. In my conversations with advisors, I often find concern about the team is second only to concern about the clients. Bringing the team in earlier rather than later can have pros and cons associated with it.
- Your team members likely know you are considering what’s next for your team or firm based on a number of factors, such as the age of the lead advisors, the desire to grow without taking on additional debt, or the desire to access resources the firm or team cannot develop on their own. If you have smart team members, they will often wonder what will happen with the firm in the future.
Be as open as you can be long before decisions are made about what you might be considering, and do the same regarding your vision for the firm. Don’t express anything that may make them concerned or worried, but rather talk openly about your goals, desires, obstacles and long-term objectives. Make them part of the decision-making process. - Consider whether you want to bring team members into the process once you start to identify an advisor, aggregator, or larger firm platform you believe could be a good match for what you do. It’s all about your culture. You don’t have to have everyone engaged in this process. Rather, you could select only a few people who are key decision-makers with you.
Depending on who you engage, you need to let them know what role they are playing in the decision-making process. If you value their input and believe they might see and hear things you wouldn’t, by all means give them a key voice. However, if you don’t believe they will be objective (after all, their future is at stake, too) then be clear what you want their role to be, how much input they are allowed to have and what you are looking for from them for their contribution. - When you believe you have found your match and you are negotiating for next steps, if you haven’t brought team members into the process heretofore, this might be the time to do so. In many cases, there are aspects that get missed as the final deal gets done. Things like communication with clients, compliance considerations, investment strategy differences and even location of team members are just small examples of things I have seen get overlooked by the lead advisors when they haven’t consulted with their team members before the final deal is agreed to.
Ask your team members what concerns they have and what you need to be thinking about to ensure an easy transition. It can be hard to open yourself up to input and be told you might have missed something important, but this could save you a lot of difficulty on the back end by identifying areas of focus. - Once you know who the new team, firm or advisors might be, find ways to get your team members face-to-face time to allow them to ask questions and share their stories. The biggest concern, even for those team members who are participating monetarily in the next steps, is “What happens to me from here?” People can’t help but consider the impact on their own lives. There may not be answers, so providing that face time could be critical. If you have answers about what’s next, by all means share those answers on an ongoing basis. People want to be heard and seen — don’t keep them in the background until all of the pieces have been worked out.
- If possible, allow team members to be part of developing the transition process. Different people have different skills, of course, but if you can leverage your existing team to be a part of building the plan they will “own” it more quickly and will have a vested interest in making it work. They may be on overload, but shielding them from the transition isn’t to their advantage because they won’t learn along the way. Give them a chance to participate and drive some of the decisions that are being made wherever possible.
- Check-in as often as you can. You can’t overcommunicate in such situations. No matter how much you think you’ve said, and how many ways you think you have said it, people won’t have heard it.
The old “telephone” game is real. People whisper something to one person, then that person turns to the next person to repeat it, then that person turns to the next person and so on. The last person to hear the story almost always has about 20–30% of what was really said in the original message. This is because we hear information differently, and we share it through our own lenses — then the next person does the same.
Communicate in a variety of ways, too — written, 1:1, group meetings, by video and with different leaders involved. The more communication, the more team members feel engaged and part of what is happening. - Ask for input along the way. You might have had your team members engaged from the outset throughout the decision-making process. If you haven’t, now is the time to show them you care about their perspective and you want them to be a continuing part of the team (assuming that is part of the deal). Ask for obstacles, considerations, areas you have missed. Encourage them to be watchful and mindful of what’s happening and what might need to be changed. It’s not that you are looking for problems. You just don’t know what you might have missed, even with the best-laid plans, and it’s best to solicit input early on rather than fix a problem that has been brewing longer than needed!
