Making the right hires and using a firm-wide team approach to client service has helped Leonetti & Associates, a financial advisory firm in Buffalo Grove, Ill. grow and prosper, according to chief executive officer Michael Leonetti, who founded the firm in 1982.
Unlike some other firms, where advisors work very independently of each other, “we’re set up in departments instead of silos,” Leonetti said. These departments include a client services department, a portfolio management department, a team of seven financial advisors,
and a full-time compliance officer.
The financial advisor works as a relationship manager for the client, but each client is also assigned a client services person. And no one planner is always working with the same support team, instead they work with all of them, for different clients.
This means no client relationship is dependent on any one person, Leonetti said. “All the clients are clients of the firm.”
Leonetti & Associates has $460 million under management.
This approach allows any staff member to call upon all the expertise of the firm when they are working for clients, Leonetti said. “You’re not quite as dependent just on yourself,” he said.
In addition, he said, “It’s easier for us to do pretty complex cases,” because the firm can bring all the expertise to bear.
Most of the firm’s clients are small business owners, and the financial advisors often handles both the needs of the business and of the owner him or herself. In addition, a large subset of the firm’s clients are doctors practices and groups, Leonetti said.
Using this team method means “we never have to say nobody’s here that can talk to you about your question,” Leonetti said. Financial advisors can be busy with other clients, but someone from the client services team is always available.
The client services person can handle many of the questions that the client has, freeing up the financial advisor to do other tasks. But if a complicated question comes in, the client services person can go to the financial advisor who is charge of that client, or to any other member of the team for advice and assistance.
The firm uses a customized computer system that logs all the conversations, letters and communications that anyone has with a client so there is total transparency for the financial advisors.
What makes this system work is a trust in each other, Leonetti said.
The financial advisors need to know the client services people are doing the best for their clients. Good hiring practices is what makes this kind of approach successful, he says.
Leonetti said that his firm actually uses a testing system to find people’s natural strengths and weaknesses as part of the hiring process. This process allows him to make sure that employees are a good fit for the job. For example, he said, a good client services person needs to want to be helpful and have a good personality on the phone. They don’t necessarily need to have the same technical skills as others do because they have the support of the planners and the portfolio managers. The testing process his firm uses can help discover an employee’s natural strengths.
By hiring the right people, he said, he’s able to allow them to grow and develop within the firm, limiting turnover and allowing him to promote from within. The firm’s president, Deborah Feldman, began with Leonetti & Associates as a part-time receptionist, he noted. And one of the client services representatives started as a work-study employee during high school and eventually joined the firm full time.
Financial planning is a relationship driven business, Leonetti says, and so avoiding employee turnover is crucial. He said that would rather pay his employees on the higher end of the pay scale for their job than have to constantly replace people. “I’ve never liked salary caps,” he said.
He also says that he likes to hire in anticipation of growth, and “get the person in early, before they’re really necessary” so there is time to train them. “If everybody is swamped then training isn’t as good,” he said. The team approach also means there is always backup for every position, even if someone gets sick or is otherwise occupied, which improves client service overall.
