PHOENIX –Firms that want to increase their AUM must put everyone to work around that goal.

That is the message that Kelli Cruz, founder and managing director of Cruz Consulting Group in San Francisco, brought to her presentation at NAPFA’s 2016 spring conference in May.

“A culture of business development is everyone’s job,” she said.

Kelli Cruz
Kelli Cruz, founder and managing director of Cruz Consulting Group

“Everyone needs to know the firm’s business development plan and their roles inside that. They should know why clients should choose your firm over the competition and articulate that value with confidence,” Cruz said.

This can be accomplished by taking the following steps, she said.

1. Embed sales culture everywhere. Business development activities and revenue generation should be part of everyone’s job description, Cruz said.

“You should have both activity-based goals, such as number of phone calls and referrals."

Review job descriptions and set annual goals for new business development. Discuss progress regularly and frequently.

“You should have both activity-based goals, such as number of phone calls and referrals, and results-based goals, such as new clients and new or net revenue,” Cruz said.

Breaking the process down into small, manageable steps is often a helpful way to ease unaccustomed people into this new role.

2. Create accountability. The owner or a firm partner should lead a 30-minute (or less) sales meeting every week. Have an agenda, which might include reviewing the previous week’s activity, updating the group on the prospect pipeline, talking about challenges, setting goals for the next week and celebrating successes.

“Coach and solve problems as a team, and celebrate even small successes,” Cruz said.

3. Hire the right people. Transition existing employees’ job descriptions and expectations, but pay particular attention to hiring people who are goal-oriented, inquisitive, active listeners, passionate about the industry and the firm’s offerings within it, responsible for results, and relentlessly persistent.

“Industry and job responsibilities are trainable. Values, work ethic and attitude aren’t,” Cruz said.

“Listen to your gut when you’re interviewing people."

“Listen to your gut when you’re interviewing people. Think about your best employees, and look to replicate them. Talk to them. What makes them like working at your firm? How do they describe the culture? What makes them successful? What might make them leave? You’ll get a lot of great information, and it will help you blueprint what the next hire looks like,” Cruz said.

In addition to a well-crafted job posting, “invest in the interview process. Bring people back for several interviews and get other people in the organization involved,” Cruz said.

Use assessment tools to identify candidates’ strengths and weaknesses and get a sense of how they would perform on the job, Cruz said.

After investing time in the hiring process, spend some effort on the transition, she said.

“New hires want to do a great job for you. Set them up to be successful in the first 90 days,” Cruz said.

4. Train and coach the sales team. Rainmakers are a good choice for this function. If that isn’t an option, consider hiring a sales and marketing manager with a record of coaching success.

Existing strong performers can also serve as teachers, Cruz said.

Seek advisers with highly satisfied clients and high client retention rates who receive unsolicited praise from clients and client referrals.

“Look for employees with natural relationship and connector skills.”

“Look for employees with natural relationship and connector skills,” Cruz said.

5. Rethink the firm’s process. What are the challenges and structures around developing business? Are all the advisers responsible for finding new business?

Think about whether advisers are given enough time to spend on this crucial task and how the firm’s principals can free themselves up to teach business development skills to other people.

6. Reward and recognize success. The firm’s compensation plan should recognize activity and reward results.

What behaviors and outcomes are desirable? Volume or quality? Team or individual results? Net new assets or net new revenue?

Keep the compensation plan simple,” Cruz said. “The more complicated it is, the more difficult it is to track, evaluate or use it as motivation.”

Make sure that what is being paid to find new business is sustainable over time. Align the timing so that contributions and financial rewards happen together, and make sure that employees understand what they need to do in order to earn more.

“You don’t want people paid at a senior adviser level when they’re not developing business. I’m not going to propose that you tell them that they either start generating new business or they’re out,” Cruz said.

“Someone may not ever generate new income, and as a result they may max out on their compensation,” she said.

As the firm converts the convertible and brings in employees with new expectations, the culture will gradually become one that prizes new business development, Cruz said.

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