When Lewis Schiff presented the preliminary findings from his research at the Investment Advisor/Moss Adams Advisor Summit in November 2007, there was an immediate reaction from the audience. It was not a positive reaction. In murmurs and then in questions directed to Schiff during the Q&A portion of his program, a number of advisors in attendance took umbrage at Schiff’s suggestion that the most successful advisors were Machiavellian workaholics who were not interested in working with “good” people but overwhelmingly said their most common negotiating approach as “do whatever you need to do to win.” Of course, he was not suggesting or recommending any specific approach; as a serious researcher, he was merely pointing out what the data showed.
There were two major findings that Schiff said many advisors found to be “uncomfortable.” First is the number of hours worked: MCM advisors said they toiled an average of 62 hours per week compared to 37.5 hours reported by “aspiring” advisors–those who have yet to achieve MCM advisor status. But Schiff points out another finding that sheds light on the hours-worked issue: “MCM advisors use coaches; they’re trying to make their time worked more efficient. The second uncomfortable finding is the strong “enlightened self interest,” evinced by the MCM advisor, who constantly “puts himself in the flow of money.” Recall another characteristic of the MCM advisor, counsels Schiff: “they chose to be advisors because it is a financially rewarding profession.” They appear to be “fairly intense; they own up to being Machiavellian,” but he reminds us that in the end there are only three ways to become wealthy as an advisor.
First is to follow the way of the MCM advisor: work many hours, negotiate fiercely, network ferociously, continually educate yourself, persevere in the face of adversity, and always put yourself in the flow of money. The second way, he says, is to be lucky, especially when it comes to finding one or several high-net-worth and influential clients who give you a solid base for your practice. The third way is to be extremely talented in what you do, which is by definition a very tricky achievement. Looked at that way, for those advisors who want to become wealthy themselves, you can at least control more of your destiny by taking the path of the MCM advisor. Schiff reminds us that the “aspiring advisor and MCM advisor share much of the same DNA,” and that even the MCM advisors themselves “don’t share all the traits equally.”–James J. Green