Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Bev,
We are experiencing the reverse problem of much of what I read in your columns. The advisor who founded our firm and still runs it has brought in his 34-year old son as his clear successor. We all knew this would happen and the son, whom I will call “Bill,” has gained experience working in the institutional investment area for one of the large investment banks. Bill has never wanted to push himself on us and has been very respectful and deferential.
In fact, this is the problem.
Bill is a great leader. He is quiet yet serious and knowledgeable. His father, on the other hand, is a hothead. His father has embarrassed some of our administrative people by shouting at them in our lunchroom and berating them in meetings.
Sometimes we find it hard to believe Bill is actually his son because Bill is very pensive and thoughtful. And it’s not just the style differences. Bill has some good ideas about things we need to change in our investment process. Our results have not been excellent for a few years and many of us have been clamoring for some changes. Bill seems to know what to do and has the experience and capability to do it.
This is a “reverse” problem because I typically read about successors who came in and they didn’t know as much as or were less capable than the original founder. In our case we prefer Bill to his dad.
We can’t work with Bill without risking the wrath of his father. Not one of us is interested in getting chewed out in the lunchroom or belittled at our next team meeting.
Is there some way we could give more power to Bill? Could we encourage what he is doing without appearing to diminish his father?
We have to be careful because I don’t want his father to see Bill as an adversary, and Bill has done nothing to try and compete with his father or push him aside.
We need change and we see the possibility with Bill. But we don’t know how to unlock it.
A.Y.
Dear A.Y.,
When I taught small business management to incoming freshmen at Suffolk University, my favorite module was on small family businesses. There are so many other factors complicating these situations outside of the normal problems!
I see what you mean by a reverse problem; it usually is the newcomer everyone worries about – how will they disrupt things? What will they change? Will they like their predecessor? It can be unnerving and unsettling until you see how they will fit in and what their approach will be.
You all should be pleased the heir apparent is a good guy, and smart too. There are some things you could do to improve this relationship without snubbing the father or getting yourselves in hot water.
I don’t know all of the dynamics in terms of your role or that of other advisors. Some of you may be in a better position to put forth an idea, while for someone else it might seem very out of place. Some may come across to not only the father, but also Bill, as disloyal. You must watch out for this.
One idea is to propose a working committee, headed by Bill, to formally review your investment process. It sounds like the discussions have gone on for a while, and there is acknowledgement that the process needs to be fixed, but inertia is in place. Could someone put together two to four people who would have enough insight or knowledge to participate on this group? If Bill were to lead it, with the plan that you present final recommendations to the father for “approval,” it might be a way to get him to be more effectively heard. If it was possible to create a couple of different options for changes, and ask the father to choose the best idea, that’s always better than putting one idea and saying “please agree!”
Another thing you could do is to subtly drop positive feedback to the father about your working relationship with Bill. Sometimes, if you can pull it off without seeming disingenuous, you can do this while also complimenting the father: “You made an excellent choice bringing Bill into the firm. Many of us enjoy his calm and thoughtful manner and he is very knowledgeable on investing.” Of course you can’t overdo this, but make sure you are crediting Bill, to his father, and letting the father know how much you all value him. It is possible the father doesn’t give Bill a lot of authority because he is concerned about how that would look to other long-time advisors. Let him know you are pleased with Bill and enjoy his leadership.
I’m hoping you are a bit more worried about how this will turn out than the reality of the situation. Bill is his son and I would hope bringing him into his firm validates the fact that he believes in him, thinks he can do a great job and wants him to lead the firm over time. I know human behavior is never predictable, but this should have a good outcome for everyone in the long run.
Dear Bev,
I appreciate your work on being non-salesy. What do you do when you have an advisor who grew up in the brokerage world and only knows how to sell? It goes against our culture to always be looking for the next lead without taking care of the clients you have. New revenue is great but not if we lose clients once we onboard them.
T.K.
Dear T.K.,
I’m not quite sure of your question. I agree that in the financial advisory business being too salesy is not effective. Pushing someone to work with an advisor would likely backfire, since it is such a personal and important decision to make.
However, there is a spectrum so I’m not sure if you reject this person’s approach because the general climate of your firm is not to sell at all? In many brokerage firms, they do offer sales training and it is more common to learn that skill in that area of our industry but the days of calling lists and dialing for dollars are long past thanks to “do not call lists” and voice mail. Most of the FA’s I work with in the brokerage sector are doing the same sort of networking and looking for referrals that independent advisors are doing. This person may have just learned techniques that he/she uses effectively but it isn’t egregious.
The one line that did concern me was the clients who came in but are not happy about it and then leave right away. I don’t know if this is factual or conjecture based on your note but obviously, if this is happening, examining the qualification and closing process is important. You might suggest that everyone in the firm look at their retention, or that the firm review lost clients over the last X number of months to find any themes. You definitely want evidence that this behavior is detrimental before you bash a colleague’s actions.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995. In 2008, she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers. She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here. 
