August 24, 2011

Why Partnerships Are Best

In my experience—and based on my latest survey—I am now declaring: Multi-advisor partnerships are a best practice

A total of 265 advisors have responded to my “Best Practices 2011” survey so far.  Considering that I asked 48 questions, I am extremely pleased. 

The wealth of information in that survey will keep this blog going for a long time. (Previous articles from “Good’s Best Practices Blog” are archived here.)

And you can still take the survey here, and compare your answers to best practices.  Respondents will also receive a copy of the final report as well as my enhanced eBook—“Making Referrals Happen.”

Since there are at least several hundred “best practices,” we have to start somewhere.  Let’s start with partnerships.

Partnerships As a Best Practice

I hate to say, “I told you so,” but I’ve been telling you partnerships are a good thing since 1989 when I wrote: “As we move into the 1990s, I firmly believe that small advisor organizations operating within the framework of larger companies will become the wave of the future. I believe that the $250,000 producer operating with one-eighth of an assistant will survive as an entry-level position only. People will come into the industry and when they have proven they can sell and deal with clients, they’ll have two choices: Develop their own organization, or develop a partnership complete with support staff.”

In my experience—and from this survey—I am now declaring: Multi-advisor partnerships are a best practice.

It’s a Numbers Game

If success is measured by AUM, these numbers from my survey tell the tale. You are more likely to have $100 million as part of a multi-advisor team.

 

$50 million AUM and less 

$100 million AUM and more 

Single Advisor Shop

65.30%

28.40%

Two-way partnership

13.60%

33%

Three-way partnership

2.40%

16%

More than 3 partners

6.80%

9.90%

Other

11.90%

12.30%

Does this mean that if you are a single advisor and do not ever want to be part of a multi-advisor team, you are road kill on the success super highway? Not at all.

There are hundreds of “best practices.”  Each is a specific skill. 

I don’t believe anyone could deploy all best practices.  You would not have time to be an advisor.  But remember, it’s the FA who deploys the most best practices who gets in the fast lane on that success superhighway.

Partnerships Best Practices

Quite obviously, there are best practices within best practices.

It’s one thing to say, “Partnerships are best.”  No sooner do you make such a statement than images of failed partnerships bubble to the surface of memory.

One way to identify best practices is through failure analysis. 

Why do partnerships sometimes fail? If we know that and take effective steps to prevent it, aren’t the steps we take at least worthy of consideration as best practices?

Over the course of working with some 5,000 teams, I’ve seen it all—the successes, failures and also-rans.  I’ve mostly written up these observations in seven articles beginning in 1989 through 2008.  If you want to strengthen your partnership, form one or even get out of one, I strongly recommend you take a look.

My partnership white paper is available here.

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Bill Good is chairman of Bill Good Marketing and writes a regular blog for AdvisorOne. He is also the author of "Prospecting Your Way to Sales Success" and Hot Prospects. His “Sales Seminar” column appears monthly in Research Magazine.

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