The Million-Dollar Financial Advisor Team: Best Practices from Top Performing Teams

The Million-Dollar Financial Advisor Team: Best Practices from Top Performing Teams

by David J. Mullen, Jr.


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David Mullen, Jr., whose financial advisor program at Merrill Lynch had a success rate twice the industry average, shows advisors how to effectively offer wealth and financial management services under one roof to better service clients.

When exacting clients, high expectations, and the need to grow define your job, you need to be at the top of your game. That’s why more and more financial advisors are pooling resources to meet demand and joining teams in the process.

Yet many advisory teams fail to reach their full potential. Why do some teams soar while others struggle? The Million-Dollar Financial Advisor Team takes you inside some of the highest functioning teams in the industry, uncovering the best practices that fuel success. Start, tweak, or rethink your own team by learning how to:

  • Select the right structure
  • Agree on a team vision and a plan to achieve it
  • Define individual roles and responsibilities
  • Retain top performers through thoughtful, results-based compensation
  • Save time and effort by crafting efficient processes for every key task
  • Catapult revenue with wealth-management offerings that clients will pay a premium for
  • Expand your practice with great marketing

By implementing effective team-building strategies and building a highly functioning team, you’ll gain more affluent clients—and serve them better—than you ever would alone.

Product Details

ISBN-13: 9780814439203
Publisher: AMACOM
Publication date: 08/21/2018
Edition description: Special
Pages: 304
Sales rank: 376,575
Product dimensions: 6.20(w) x 8.90(h) x 1.20(d)

About the Author

David J. Mullen, Jr.(Englewood, CO) is the author of The Million-Dollar Financial Advisor and The Million-Dollar Financial Services Practice. He is a 37-year industry veteran and former managing director at Merrill Lynch, where his advisor training program had a consistent success rate of twice the industry average.

Read an Excerpt


The Case for Teams

One of the best descriptions of a team that I have seen is from Jon Katzenbach, an organizational consultant, who describes a team in the following way: "A small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable."

Teams are the future of financial services, and experts have repeatedly shown that advisors working on teams outperform sole practitioners. Recently there was an extensive study done by PriceMetrix that quantified the value of teams. In this study, the researchers found that teams have a higher propensity to do the right things that cause their business to grow. The study also found that the increased accountability of working on a team promoted a higher level of discipline in individual team members. The Price-Metrix study also showed that teams have 17 percent more assets than sole practitioners. In fact, clients have shown a greater willingness to consolidate their assets with a team. Teams retained their most affluent clients longer and had clients with more assets. The study also revealed that productivity was higher for advisors on teams, with assets growing at an 11 percent higher rate and revenue 17 percent higher.

My own observations of working with many of the top teams in our industry is that for an advisor who aspires to reach a million- and ultimately a multimillion-dollar practice, being on a team is essential for the following reasons:

* Accountability. Financial advisors, like everyone else, perform better when they are accountable to someone. A highly functioning team has accountability through clearly defined roles and responsibilities, performance reviews, and compensation. This level of accountability is not possible for a sole practitioner.

* Idea Sharing. Financial advisors who work together to achieve common team goals are able to strategize and share ideas on how to improve their practices. This extends to marketing, portfolio management, client service, and improved team processes.

* Resources. Pooling resources together to invest back into the team has significant and positive ramifications for team growth. Having more money to invest in administrative members, marketing budgets, and client service increases productivity.

* Client Driven. All the research I have seen and my own experience validate that clients prefer working with a team as opposed to a sole practitioner. The primary reasons are a transparent succession plan, better service, and more depth of expertise. The more satisfied the clients, the more assets, more referrals, more business, and higher retention the team will get from each highly satisfied client.

* Succession Planning. This allows the individual clients to feel confident of the continuity of their relationship with the team. It also provides peace of mind to the advisors that their clients will be taken care of when they exit from the business, as well as creating enterprise value upon retirement for the partners.

* Increased Capacity and Delegation. Having multiple team members with different responsibilities enables each individual team member to specialize and focus more on their primary areas of expertise. Individual FAs can focus and spend more time with fewer, more affluent clients. They have more time to prospect because of the increased capacity. Delegation enables financial advisors to spend much more of their time on what I call the big three: developing and implementing their wealth management offering, contacting their best clients, and prospecting new affluent clients.

* Client Communication. One of the great values of a team is the positive impact on perception that it has for the team's clients. Clients consider it a benefit when they know what's going on with their advisor's team: knowing there is a succession plan in place, and that when their financial advisor is away from the office they are still covered. Introducing the new team and sharing the benefits should be among the highest priorities a newly formed team has and should be one of the first things to do as the team is formed.


One of the most powerful forces that drives teams to perform at a high level is synergy, the interaction of two or more entities to produce a combined effect greater than the sum of their parts. A synergistic relationship between team members occurs when they brainstorm over ideas to improve their practice, hold each other accountable, have a division of labor where they contribute their different talents to overall functioning of the team, pool financial resources so they can attract and retain high-quality employees, and back each other up when one of the partners is out of the office.

A team of financial advisors is one of the best examples of synergy: When two or more advisors come together they are more productive than they are individually. This powerful force of synergy is what is responsible for highly functioning teams to perform at such a high level.

However, the force of synergy can be reversed with a dysfunctional team. A lack of synergy creates chaos, confusion, infighting, and lower productivity. This occurs largely because of the emotional impact and time wasted on dealing with issues that cause a team to be dysfunctional. Think of a dysfunctional marriage.

The two most common causes of reverse synergy:

1. Poor planning when forming a team. Unfortunately, one of the negative impacts of the evolution and proliferation of teams is that teams have been hastily formed without proper due diligence prior to the team's formation. So many advisors feel they are missing out by not being on a team that they form a team just for the sake of being on a team. In my experience, there are too many teams that are functioning at low levels because not enough time was spent during the formation stage of team building. In many ways teams are like a professional marriage, and while no one would argue that a good marriage is always blissful, a bad marriage is miserable. We know that 50 percent of marriages fail as a result of being dysfunctional, and I believe the same is true with financial advisory teams.

2. Lack of alignment in personal values. One of the biggest causes of a dysfunctional team is that individual team members' professional and personal values are not aligned. Just as most individuals that can maintain a long-term successful marriage would attribute that success to shared values, the same is true for a financial advisor team. Examples of shared professional values include investment philosophy, commitment to professional development, the wealth-management process, long-term goals, work ethic, service commitment, retained earnings vs. money reinvested back in the business, target clients, infrastructure of the practice, ethics, and trust.

The top advisor teams all have these common shared values. Personal values that should be evident include:

1. Putting the team ahead of individual needs

2. Committing to always doing the right thing for clients and team members

3. Recognizing all members of the team

4. Overcompensating high performing and loyal team members

5. Being client-focused


Having been part of a team and having worked with countless teams as a manager and professional coach and trainer, I can say without a doubt that teaming makes sense and every advisor should strongly consider forming or joining a team. In the next chapter, you'll learn what the secret sauce is for creating a highly functioning team.


Forming a High-Functioning Team

Being part of a high-functioning team is preferable to being a sole practitioner, yet a poorly functioning team can yield the opposite effect. The make or break of a team's success is making sure it includes the right people. In so many ways it's like a professional marriage — the institution of marriage has stood the test of time and very few will argue the benefits of a good marriage. However, the key to a good marriage is who you marry; being in a bad marriage is worse than not being married at all.

Once you make the people decision you can determine the right structure. The structure will drive the right implementation of building a highly functioning team. When I think of my own experience in forming a team, the most important factor was the character and the values of my future partner. I trusted him, I admired his worth ethic, his ambitions were aligned, I liked him, and I respected him. All the other reasons for forming a team were present and have been described in detail, but without the right person none of those other benefits mattered.


With the right people and in the proper situation, any one of a variety of team designs can be very effective. Vertical teams keep things simple and allow the financial advisor to keep control and guide the direction of the team. Horizontal teams can create great synergy yet may develop leadership issues. Alliance teams are easy to put together and allow for team independence but must work hard at resolving issues related to shared resources. Holistic teams offer total solutions and, although more complicated in structure, generally have the most comprehensive product and service offerings.

Vertical Team

A vertical team is designed around a single financial advisor. Typically, this financial advisor is already very successful and wants to build a team to support her strengths so that she can delegate all other responsibilities to other members. One of the biggest benefits of a vertical team is that the financial advisor gets a large majority (typically 80 to 100 percent) of the equity ownership. However, a vertical team will not be able to take full advantage of the brainstorming, succession planning, and specialization features other team structures enjoy.

One of the best examples of a successful vertical team was run by my friend Taylor Glover. Taylor had incredible talent in business development and the ability to develop deep and strong relationships with his best clients. Recognizing his talents, he realized that the best way to capitalize on them was to build a team to support him. He already had a very good client associate but knew he needed more support. He needed a team member who could manage his practice, and he found Art. While Taylor was involved and provided oversight, Art ran the day-to-day business for the team. Art was not the rainmaker that Taylor was, and didn't have the deep relationships with Taylor's best clients, but he was highly organized, had strong interpersonal and communication skills, and had experience running a business. Art took over the responsibility for managing the team. He developed a superior service model, managed the other team members, ensured the investment strategy and models were implemented, and acted as the relationship manager for many of Taylor's clients.

After a few years, Taylor added Austin as another relationship manager, while Art continued to manage and add client associates and team administrative managers as needed. Over the fifteen-year period that Taylor and Art worked together, the practice tripled to $14 million, and Taylor was Merrill Lynch's largest producer at the time. While Taylor kept 100 percent of the equity ownership, he paid Art extremely well. When Taylor retired, Art become the largest equity partner of the team and has since led the team to even greater success.

The potential roles on a vertical team include:

Partner. Holds majority equity ownership

Financial Planner or Investment Associate. Oversees the planning process for the team's best clients

Financial Analyst. Oversees the investment process and investment strategy

Relationship Manager(s). Oversees assigned, smaller relationships

Team Manager. A relationship manager or a junior partner who is responsible for managing the team

Administrative Manager(s). Responsible for the administrative and operational duties of the team and servicing the team's clients


* Positives

* Less complex and easier to manage

* Minimal conflicts and misunderstandings

* Clear leadership

* Minimal compensation issues


* Lack of opportunity to brainstorm and share ideas

* Challenge of succession planning

* Limited specialization

* Challenge of having client coverage when the partner is unavailable

Horizontal Team

This structure is best suited for financial advisors that appreciate the value of collaboration, feedback, brainstorming, and shared decisionmaking. I believe there is merit to the expression "two heads are better than one." I also believe one of the real benefits of a team is to have the opportunity to share ideas, get feedback, get input on decisions, and share accountability — and that these benefits can only be provided by committed and equal team partners. Partners can have different skillsets, areas of expertise, and experiences that can complement one another and expand the reach of the team.

Not all horizontal teams have equal splits, but no single partner has an overwhelming equity position. Each partner's value might not just be the production she generates, but the value she brings through portfolio management or other roles and responsibilities. What's more, a horizontal team only makes sense financially when each team member brings significant value to the team, providing the critical synergy that all high-functioning teams possess. The best horizontal teams have members who strive to contribute more than their equity split. Imagine two team members who are fifty-fifty partners each striving to contribute at a 60 percent level. This level of commitment is essential for the team to do very well and for each partner to be financially successful independently. Otherwise they would be better off in a vertical partnership.

One of the best examples of leading a horizontal team is Ross and Matt. Ross started the practice and built it to close to a million-dollar level. He was bright, hardworking, and had excellent interpersonal skills. Matt was a relatively new advisor who sat in an office close to Ross, and the two began to share ideas and collaborate on an informal basis. Ross determined that Matt was "wicked smart" and liked that he had CFA designation. Although Matt had a much smaller practice, Ross recognized his need to raise his game in portfolio management and believed that Matt would be accretive to his practice because of his investment management skills and experience. They formalized their team and while Matt was at first given a smaller equity position, Ross was generous in increasing Matt's split over the years. Today they are very close to a fifty-fifty split and are running a $5 million practice.

Ross has continued to be the primary relationship manager for their top fifty relationships and oversees the business-development activities of the team. Matt is responsible for developing and overseeing the team's investment strategy and managing the core investment models. The team believes one of their strongest values to their clients is having Matt act as the portfolio manager. He has consistently outperformed the indexes, providing their clients with excellent long-term returns. The clients have direct access to Matt, which the team believes gives them a significant competitive advantage.

The potential partner roles on a horizontal team include:

• Investment strategist

• Business development

• Holistic planning

• Portfolio managers

• Asset management

• Intergenerational planning specialist

• Individuals

• Retirement plans

• Corporate executive specialist

• Retirement income specialist

Other non-partner roles for a horizontal team could include:

• Investment associate. Focused on planning, client relationships, or team management

• Relationship manager. Focused on smaller client relationships

• Administrative manager. Focused on top fifty clients

• Client associate. Focused on servicing smaller relationships

• Operations associate. Focused on administrative and operational needs of the team



* Idea and decisionmaking sharing

* Succession planning

* Specialization that enables more expansive offerings

* Adds to capacity of team

* Better coverage when a partner is out


* Equity splits require each partner to contribute more than their fair share

* Potential conflicts on equity splits

* Potential misunderstandings or personality conflicts

* More time required for team communication and decisionmaking

* Less autonomy for individual partners

Alliance Teams

The alliance team is characterized by two or more financial advisors who continue to run their own practices and collaborate for marketing and/or product specialization purposes. They also share administrative resources such as assistants, analysts, planners, etc. They do not pool assets and maintain separate FA production numbers. Accounts may be shared on a case-by-case basis.


Excerpted from "The Million-Dollar Financial Advisor Team"
by .
Copyright © 2018 David J. Mullen, Jr..
Excerpted by permission of HarperCollins Publishers.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Introduction 1

1 The Case for Teams 11

2 Forming a High-Functioning Team 19

3 Create a Vision 39

4 Assigning Roles and Responsibilities 63

5 Performance Reviews and Measurements 85

6 Team Compensation 97

7 Team Communication 113

8 Best Practices for Hiring 127

9 The Product: A World-Class Offering 145

10 Building a Marketing Division 167

11 Developing Processes 205

12 Team Leadership 221

13 Highly Functioning Team Case Studies 233

Appendix A The Team Best Practices Checldist 279

Appendix B Process Gap Analysis Form 284

Index 287

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