Football lessons for wealth managers

In the wealth management industry, optimizing wealth manager productivity while satisfying client needs for interaction with those managers is a delicate balancing act. Firms have learned that a manager’s success depends on more than an individual’s talents; the difference between success and failure depends on the organization’s leadership strategy. Put simply, firms are more likely to succeed by actively monitoring their employees’ productivity and providing their wealth managers with the necessary tools and technology packages.

Football provides a useful analogy here. The ideal wealth management executive is a coach and the wealth managers are quarterbacks, or wealth quarterbacks, in this case. The coaches use their experience and insight to help transform those wealth quarterbacks with raw talent into all-star performers.

NFL quarterback Peyton Manning, for example, possessed natural ability and strength, but that doesn’t inherently translate into a successful career. After all, there are plenty of great college players who never make it any farther. Manning was helped all through his career by good coaches, particularly after his injury several years ago when they helped him to recover his throwing arm.

The same can be accomplished in the financial world. To transform up-and-coming wealth managers into the Peyton Mannings of wealth management, executives should approach the process like coaches do, using the following three tactics:

Protect your quarterback. To keep quarterbacks healthy during practices, coaches give them a red jersey to wear, signifying that other players should not hit them. It’s a logical move; avoiding hits in practice saves quarterbacks from getting hurt before games, where their particular role has a tangible impact on the result. Wealth managers frequently take hits in the form of administrative functions, operational activities, training and development, which distracts them from their big games of client interaction and investment advice.

A 2011 Capgemini study determined that wealth managers spend only two-thirds of their time on client-facing actions. Two years after the Capgemini study, research by Cerulli Associates found that wealth managers only spend about half their time interacting with clients. That’s a scary trend, considering that client relationship building is one of their highest value job requirements.

Administrative functions are critical for any firm, but technology has evolved to a point where the majority of these functions can be automated by an integrated platform that connects processes and programs. This type of platform can provide powerful end-to-end wealth processing capabilities for the front, middle and back office. With a streamlined infrastructure, firms can acquire, manage and report on all client data through increased automation. This, in turn, enables wealth managers to focus their energy on creating the best possible experience for their clients.

Look beyond the box score. Coaches use stats and game film every week to examine their own system, correct any flaws, and develop a game plan. As game day approaches, the head coach also uses specific motivational techniques to challenge and encourage his players in a way that helps them grow. Senior management needs to do the same. By examining internal procedures on a regular basis, leadership can see what works and what needs to be adjusted. Better processes lead to improved data gathering, which makes evaluation easier each week.

Firm-wide, this process helps senior management measure and report the effectiveness of their wealth managers, uncovering along the way specific methods to standardize and scale the way they deliver financial services and advice. By analyzing performance, firms can determine where wealth managers’ skills are being used productively and how leadership decisions contribute to their success. Wealth managers also benefit from self-evaluation with upgraded tools that help them perform better at each stage of the client life cycle, such as goals-based planning and proposal generation.  

Let the QB run the offense. If you watch Peyton Manning in action, one of the first things you notice is that he’s actively communicating with his teammates before the play. At this phase in Manning’s career, his coaches trust him to read the defense and change the play at the last-minute if he sees something that he can exploit. Wealth managers need to have similar autonomy. After all, evaluating situations in real time and making adjustments as necessary allows wealth managers to best position their clients to achieve their goals.

Firm leadership must understand and embrace the fact that their managers are on the ground, dealing with clients daily. Only with the freedom to make decisions, especially when able to view their clients’ information holistically, can they adapt on the fly and make the appropriate changes. With the right tools in place to give wealth managers a clear understanding of the total client relationship they can deliver more targeted advice and better results. These tools include technology that allows managers to view their books of business at an aggregate level, but also drill down into account details; goals-based planning and reporting functionality; and data integration and document management to help oversee prospects and current clients.

The new challenge for wealth management executives is to help their wealth managers transition to wealth quarterbacks. Strong leadership and coaching is the key. It will take a philosophical and culture shift for many organizations, but taking the time to ingrain this mindset throughout every layer of the organization will be well worth the effort. Hall of Fame coaches know how much responsibility to give to their quarterbacks, what data they need to succeed and which buttons to push to properly motivate their players. In an investing landscape that evolves constantly, the ideal wealth management firm will learn how to do the same.

Mr. Chiaradonna is senior vice president, North America Private Banking, for Oaks, Penn.-based SEI. He can be reached at [email protected].