While I expect to work for many years with my firm's No. 2, Cal Brown, I'm 64 and Cal just turned 59. It was clear a few years ago our firm needed a management structure for the next 20 years.
Since our younger employees are not yet in a position to buy or manage the firm, I took the counsel of Mark Tibergien, CEO of Pershing Advisor Solutions, based in Jersey City, N.J. He recommended I look for a firm providing the management structure we'd need, while giving our young professionals time to grow into the leaders of tomorrow. That meant some sort of merger or combination type of transition before I leave the firm.
My firm is an amalgam of several financial planning practices. In 1999, I purchased the Monitor Group from Lynn Hopewell, and merged my firm's operations into it.
I was 51 then and Lynn was 62. Lynn's firm was quite a bit smaller, with five employees and only 100 clients. Lynn was heavily involved in client advisory work, but he was not in good health. He needed to retire from the business, and soon.
That's not my situation now. My health is fine and I don't want to retire. Rather, the transition will be the culmination of a multiyear strategy to develop the Monitor Group into a firm that maintains its cutting-edge approach to wealth management.
You're now asking: "What the heck is that strategy, and how is their staff evolving as they get closer to a transition?" Clearly, we need to change the organization and our professionals' expectations. For years I did the rainmaking, arranging all new and potential client meetings, and I personally knew all the clients.
That part had to change. So I consciously built the compensation system with significant salaries and some bonuses for retention and later added small bonuses for new clients. That system allowed me to leave the client advisor part of the business as a majority of my clients were moved to my colleague Cal.
In time, clients were handed off to a third, fourth and fifth advisor with no problems or internal resistance. This allowed me to move from working directly with clients to mentoring advisors and working on our brand and marketing. So far, so good. Or so I thought.
In reality, it was not so good. I had nicely unplugged myself from day-to-day client management, but had not put the right compensation in place to motivate staff to grow their client base. They did not have the proper training or incentives to develop business. Virtually every client was given to junior advisors or was referred by an existing client, other professional or called the firm because of our media exposure and brand marketing. Our organization evolved and was transition-ready, but our compensation system was not.
The answer? A new system was created with fixed and variable components based on revenue generated from existing business, clients served, new business originated, and company productivity and profit growth. Is it perfect? No, but we're more than ready now to evolve as an advisory firm as necessary.
MOVING FROM SUCCESS TO SIGNIFICANCE
Notably, one of my professional peers asked me, "Why are you doing all this work before you have a transition? Is this really necessary?" He probably asked because I'm moving from a relatively calm lifestyle where I don't see clients and our business is profitable and very stable to working really hard for the next few years to assure a good transition.
That made me think: "Why am I doing this? Ego? Need for more money? Delusions of grandeur? And, exactly what am I going to do?"
It's important to reflect on the why first. My top five StrengthsFinder list include: Learner-Achiever-Activator-Futuristic-Strategic. I need to learn new things and set goals that I must accomplish, while developing strategies for the future, all on a regular basis. Doing one thing at a time does not fulfill me.
My professional and personal life shows that pattern. I've had a multitude of paying and volunteer jobs in the past 30 years, with at least 16 distinct titles. Each job required learning skills, setting goals and accomplishing several things at once.