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Building a business is difficult and the same is true of building and improving advisory practices and wealth management.
In a practice’s early days, principles are most likely focused on getting clients and assets in the door. That’s not unlike any other startup where the focus is on the top line, then further out, reaching profitability. Important objectives to be sure, but often times along the way, founders and principles lose sight of other crucial elements. Those include soft skills, being a good boss and leadership.
For advisors, the name of the game in terms revenue and profitability is client satisfaction, but the advantages of a happy staff shouldn’t be diminished. There are tangible benefits to increased employee satisfaction.
“One study found that happy employees are up to 20% more productive than unhappy employees. When it comes to salespeople, happiness has an even greater impact, raising sales by 37%,” reports Camille Preston for Forbes.
Looked at another way, data confirm that publicly traded companies with above-average amounts of happy workers outperform rivals with less-than-enthusiastic staffers. Those are points advisors should keep in mind honing leadership skills.
Leadership Matters
Practice owners and principles may not realize it, but an optimal place to start in terms of improving leadership and employee satisfaction is via information sharing or transparency.
Sue Thompson, head of SPDR ETFs Americas distribution, noted that in a recent SPDR MasterClass, Kate Issacs, a senior lecturer at MIT Sloan, highlighted the importance of sharing information with staffers and how that can keep them engaged.
“Unique information is essential for learning and innovation, but teams often struggle to unearth uncommon information,” notes Thompson. “In fact, information held by more members before team discussion begins has more influence on team judgments than information held by fewer members, independent of the validity of the information.”
Point is broader dissemination of information is likely to improve a practice’s decision-making process and, thus, outcomes. There are effective steps principles can take to bolster decision-making within a practice while including employees.
Those include brainstorming, congenial debate and “position themselves as information managers (and) encourage discussion of privately held information to increase the focus on unique information,” adds Thompson.
How Advisors Can Swiftly Approve Leadership
No one is perfect, but in any field, self-awareness and leadership go hand-in-hand. It’s not as much about being vulnerable as it is conveying to staff that simply because you’re the boss, you don’t have all the answers. There are other considerations in elevating practice leadership, the bulk of which are cost-effective and easy to implement.
“Reduce status barriers to participation and encourage equality through tactics like anonymous contributions,” notes Thompson. “Set ground rules and hold people accountable to values. Start by acknowledging that you’re going to share information and are inviting everyone to share.”
Bottom line: Advisors that want improve leadership skills should empower staff to feel as though they’re leaders, too. After all, the team is what makes the organization go and the happier they are, the better the results are likely to be.
Related: When It Comes to Retirement Planning, Mindset Matters