Where Did We Go Wrong in 2010?

The challenge for an investment advisor is that we must not only master the technical skills to develop successful wealth creation strategies.    We must also develop the confidence, grace and restraint to help our clients make smart financial decisions even when all else appears chaotic and unfamiliar. A successful portfolio is a reflection of a successful partnership between advisor and client.
I’ve begun to realize that by focusing solely on my own mastery of the technical and the psychological through study, practice, and listening to peers, I am overlooking the key to improving Abacus’s portfolio outcomes - a high performance investment team.  
Yes, we have bright, passionate, talented team members. Yes, we work well together (most days) with respect and laughter.   But given that I am a CFP® from the 80s, who is street taught, I consistently overlook identifying the steps for success for the firm’s next generation. (Darn it, says my inner imperious boss, I learned all this on my own, you should, too!)   End of the year reflection, reminds me (and energizes me) that with purposeful mentoring--each team member can be wildly more successful at every age and stage of development than the mentor. 
At Abacus, we are engaged in creating a detailed leadership pipeline for our investment team members. (For those of you who would like to learn more about developing a leadership path for each member of your team, I encourage you to read The Leadership Pipeline.) The Abacus investment team is codifying a list of seminal articles, books and lectures that every team member must read. The list must include readings that underpin our own investment philosophy and readings that directly challenge our basic tenets. It’s our belief that mastery includes the ability to embrace disconforming ideas. 
We are assigning unique conferences and readings to team members with a goal of developing disparate viewpoints and backgrounds within the team.  We have differing expectations for mastery for a team member with 1 to 5 years of experience, 5 to 10 years and 10 or more years.  
The skill map also includes the ability to listen and reflect client emotions and concerns as well as communicate complex investment concepts through analogies, stories or pictures.   Team members who have great comfort with the technical must stretch to swim naturally in the murky waters of client emotions.
The leadership pipeline can’t just be a list of skill development and knowledge requirements. Your firm must be willing to commit the resources to support each team member’s development.   The toughest challenge may be finding space on your own calendar to effectively mentor your high-potential team members.
Reviewing our portfolio successes and weakness in 2010, the Abacus investment team noted several minor missteps and misjudgments that we believe are due to our lack of “disagreement” rigor.   The entire team read High Performance Investment Teams (which I strongly recommend).   The book highlights seven behaviors of the best performing investment teams—curiosity, candor, accountability, authenticity, awareness, genius, and appreciation.   The Abacus team gave itself strong marks in many areas but we immediately identified a weakness-- we don’t share differing opinions as comfortably as we must if we want to excel.  
To mitigate this challenge, we brainstormed a variety of strategies to help us change. We do have an eccentric sense of humor so my sister-in-law knitted varied ski caps that team members wear to represent opposing viewpoints when discussing a new investment idea. The playfulness helps create an open atmosphere and the hats are a physical reminder that we are supposed to disagree (especially with me!).  
We also instituted the nine second rule.   We ask each team member for input and wait up to nine seconds for an answer.   We’ve surprised ourselves at how much richer the conversations have become now that everyone has the proper space to embrace candor.
I encourage you to read High Performance Investment Teams, and frankly reflect on your team’s strengths and weakness and plan for change in 2011.  

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