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Next Level, Next Generation

Commonwealth takes reps and their associates to a higher level.

David J. Drucker, 06/15/2006

When I heard about a new practice management service Joni Youngwirth at Commonwealth was delivering to member firms, my reaction was twofold: First, the program sounded innovative, and second, I would expect nothing less from Youngwirth, who is vice president of practice management.

The new program, called "Next Level--Next Generation," provides an opportunity for junior planners in highly successful firms to develop the critical skills needed to evolve to a more senior position within the firm. Actually, that's the "canned" definition I received from Commonwealth. Upon further investigation, the program isn't the same for all participating firms; it's geared to the specific needs of each firm and its associates. The commonality is that the firm owners are all $1 million-plus producers with a desire to take their relationships with their junior associates--as well as the junior associates' responsibilities within the firms--to a higher level.

The mechanisms for these changes is interaction between the firms and Youngwirth, the owners and associates, the owners and owners, and the associates and associates. There's a lot of intermingling of ideas, in other words, and that happens over eight months within three in-person workshops and multiple conference calls.

In this first, somewhat experimental program, four firm owners and seven associates are participating. To date, there has been one introductory conference call in which each rep and his corresponding junior associate described their current roles and what they hope to accomplish by the close of the program. There has also been one full-day workshop in which all participants gathered at Commonwealth to meet with Youngwirth to discuss goal-setting techniques, create "dashboards" for their goals, and create a list of 10 topics for future one-hour conference calls based on everyone's specific goals. In addition to future group and individual conference calls, the group will gather for two more full-day workshops in August and December of this year.

One of Youngwirth's strengths is that she listens to her reps and gives them what they want. Some of her time is spent talking one on one with reps, exercising her expertise that has deep roots in the management consulting world, solving problems one firm at a time. "When one rep and then another rep asked for this program, though, the need for a more formal approach became apparent," says Youngwirth. "Increasingly, these larger reps have underlings on whom the future success of their practice depends, and these 'junior associates' must be developed."

The process of the first workshop will give you a better idea of how this development works. First, each firm's owner and associates were asked to individually make a list of what they thought the associate needed to have in the way of training and experiences within the firm. "We noticed immediately that there was quite a bit of overlap between the owners' lists and their associates' lists," says Youngwirth. Next, they blended the lists together. Then, they prioritized the items on the blended list.

"Finally," says Youngwirth, "we took the five highest priority items and created for each an 'individual development dashboard' indicating the timeframe for its achievement and how its progress would be measured."

Examples of high-priority developmental items? Says Youngwirth, some associates might have the objective of sitting in on two client meetings per week. Or the item might be getting licensed or getting a CFP, or meeting directly with clients, or better understanding how the firm operates or how it does financial planning. "We found a way to make each of these goals measurable," she adds.

There are, of course, some commonalities of goals amongst the four firms. The content falls into three clusters, says Youngwirth: industry knowledge, operational knowledge, and softer knowledge (e.g., developing sophisticated interpersonal skills to help clients articulate their needs). "What's neat is we actually use the phrase 'it takes a community to raise an associate,'" says Youngwirth, "so sometimes we'll have an associate paired with the owner of another firm to do a presentation. Sometimes the associate learns better that way."

In weekly conference calls following the first workshop, the various dashboard items are discussed. Sometimes associates from the participating firms are on the call, other times owners join in or have a call of their own. "Some topics I will lead, and some the associates lead," says Youngwirth. "Our first call was on how to effectively conduct a conference call. The participants learned how the presenter must engage the other participants on the call."

Richard Prout, owner of Wealth Management Group in Danvers, Mass., was one of the reps to ask Youngwirth for help. "This program began when I and another rep had the same thoughts: we've got talented younger staff, and we're all getting older and looking at exit strategies." Prout, 58, says eventually selling his firm to his younger staff people is an obvious succession plan, but there's a big difference between understanding the technical components of office work and running the business. "I thought about how do I take Jamie [Upson, one of Prout's junior staff] and move him up from where he is today to the next level? How do I develop a new skill set to allow him to run the business?"

Prout and Upson, 30, are on the same page as a result of having shared goals for Upson in the first workshop. Says Upson, "The underlying goal of this program is to help identify those areas that I can improve on to help prepare me to run this firm when Rich steps out. I have the opportunity to interact with other associates who find themselves in similar circumstances, and I have four owners of successful firms giving me feedback on how to effectively handle certain weaknesses. I'm ready to learn from the mistakes of others; I don't need to reinvent the wheel."

Prout actually has three associates in the program with him. "Jamie is the one who would take over my role, but I also have a junior planner who I want to become a full-fledged planner, and an office administrator who I want to become a true operations manager. So each is being moved out of functional tasks to a higher plane." Prout, with 25 years in the business, is the only producer in his firm and has two other staff people who are not in the program at this time.

Some of Upson's goals, related of course to his ultimate managerial and/or ownership role in the firm, are improving his ability to delegate and understanding the impact of positive energy on others. "Jamie must be aware of his management skills, but also issues like the mood he brings into the office each day and how it impacts others," says Prout.

If one thinks of Youngwirth as the coach in this whole process, then, says Upson, her most valuable role may be making the associates accountable. "It's the accountability component that helps drive each of us forward," says Upson. "I would argue that business coaches are effective because of the accountability requirement they bring to the table."PAGEBREAK

And what's the end game to all of this? "From the owner's perspective," says Youngwirth, "they will have greater confidence that when they're away from the office business will go on in a way they're comfortable with it going on and that revenue will continue being produced. It's not that the junior associates aren't technically adept. They may be CFPs, but they're CFPs without a lot of experience. This program will help them learn their firms' processes so owners know the work will be done right."

Further, says Youngwirth, the associates are learning and growing. "This program is a vehicle to make sure the things that are important to these young people are begin addressed. They should be happy campers because their firms are taking an interest in them."

From Prout's perspective, the end game is having his associates be able to operate at a higher level where they're asking the right questions and developing the right processes. And, he notes, they're extremely receptive to this. "They established their own goals. All the work they're doing isn't because we imposed goals on them. They defined their growth path and we mentor them in accomplishing their goals. The focus is on, not us, which makes them even more excited."

To what extent is the program a succession solution? The fact that all the firm owners in the program are between 50 and 60 in age suggests there must be a succession component. "I wouldn't be surprised [if owners were using it for this]," says Youngwirth. "Some of the associates are children of the owners." Prout adds, "This program doesn't directly create an exit strategy, but it lays a foundation for the associates to develop skills they'll need, and that will give me the option to exit or not. It would certainly be most efficient for me to sell the firm to my employees."

What's the point of this story? Is it that all reps should change their broker-dealers to Commonwealth? Well, if you want to do that, I'm sure Youngwirth and Commonwealth's top management won't mind a bit. But short of that, the Next Level--Next Generation program serves as a valuable example of ways in which to grow your staff.

All but the most ancient advisory firm owners (and even some of them are enlightened) understand that employees aren't widgets. If you choose to build a business beyond the sole practitioner model, you've not only got to take care of employees' basic needs for salary and benefits but help them grow professionally. If you ignore this, costly employee turnover results and you've used your employees like widgets, whether or not you intended to.

So be progressive about professional growth. If you're an independent RIA, you might even find a few like-minded firms and create your own Next Level--Next Generation program. Heck, if you play your cards right, a program like this might result not only in a more mature staff, but ultimately a succession plan, too.

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