How to manage an advisory team

Financial advisors know their job involves managing money. But many advisors don’t realize that a large part of their job will involve managing people if their practice grows large enough.

“As an industry, we do a great job teaching technical skills,” said Chuck Grace, program director for the Investment Professional Leadership Program at the Ivey Business School, Western University.

There’s less focus on the soft skills that advisors need to run a successful practice, said Grace, who was a wealth management executive before joining Western.

Those skills are required for recruiting, hiring, onboarding and managing employees. “There’s a point you can’t do it alone anymore,” Grace said.

Johnathan Nightingale, co-founder of management training firm Raw Signal Group in Toronto, said the most important change a person must make when they become a manager is to their mindset.

“A lot of people, when they move from individual work to [having a team], their instinct is the management piece is on the side of the desk,” he said, noting that many still see their main job as client service and building up their practice.

That’s incorrect.

“As soon as you’ve got other people doing work within your organization, your job has changed,” Nightingale said. “Now, your job is to make the team effective. You really need that to be your full-time job, even if one of the ways you accomplish it is by still doing some direct work.”

Giving into the temptation to do everything yourself could be self-defeating, he noted.

“You’re going to burn yourself out, and signal to the rest of the team that they should be interviewing [for another job], in part because they know they aren’t going to get the training they need,” Nightingale said.

Indeed, training is one of the most important aspects of practice management — and one many advisors struggle with.

“Often, very senior people forget how they learned in the first place or forget that some of the things they do by instinct aren’t intuitive,” said Melissa Nightingale, co-founder of Raw Signal Group.

Johnathan agreed. “A lot of bosses, when they hire someone for the first time, are really flustered and frustrated because their employee does not find things obvious,” he said. “So one thing we train a lot on is getting really clear about expectations, even if it seems sort of pedantic: ‘I expect you to carry approximately this many accounts; I expect you to respond to emails within X hours.’ The worst possibility is the person you’ve hired says, ‘Yes, I already know that.’ Great!”

Grace and the Nightingales suggested advisors consider formal management training, such as structured programs like their organizations offer or online courses.

“The worst thing is to try to make it up as you go,” Melissa said. “Most people get promoted in their late 20s, early 30s, and don’t get their first management training until their 40s. And there’s this 14-year gap between the first moment of promotion and actual training, and you can do a lot of damage to yourself, to your team, to your organization in a decade of trying to figure it out.”

The training should resonate easily with advisors, as the skills that make advisors effective with clients are also important leadership skills: adaptability, a high emotional quotient and the ability to have difficult conversations, Grace said.

“The number one transferable skill we see, particularly for highly technical leaders, is they have a proven track record of learning complex things,” Melissa said. “That’s such a great starting point for understanding how to manage teams of people.”

To reinforce and extend any formal training, Grace recommends organized “peer circles” with advisors who share your goals — with some caveats.

“There needs to be structure and facilitation. You can bring in a third party to do that or create rules within a group. You don’t want it to turn into a whining session,” he said. He also suggests advisors disband or refocus the group after it reaches its goals, such as successfully transitioning to a fee-based practice.

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.