Using a structured approach to discussing important issues in your firm can dramatically improve your decision making process. It typically results in better input from others when you need to decide issues like whether or not to terminate an assistant, implement a new CRM, obtain or drop an RIA, or how to revise a financial planning process to include a written document. If the answer to any of the following questions is yes, then a structured discussion process may be helpful to your practice.
o When you meet regularly with a group of colleagues, do the same individuals voice their opinions while others remain silent? Do you wish you could hear more often from those who seldom speak but who offer valuable insights when they do?
o Have you ever procrastinated indefinitely on making a decision because you were stuck and needed input?
o Do your group discussions get off track and waste your time?
A Structured Process
Here’s one example of a structured approach for facilitating efficient and effective discussions. Its purpose is to elicit quick feedback on a specific topic. First, let’s review the process; later, we’ll apply it to a real situation involving seven advisors. Ten minutes is the hypothetical time for the process, divided among the steps outlined below.
The Written Statement
Before you begin, the individual with an issue he or she is looking to resolve must write out a statement clearly explaining the situation and articulating the feedback requested. This often overlooked step is critical.
Step 1: Share the statement. The individual who owns the issue should read, verbatim, the written statement, which might go like this: “My right-hand person’s performance used to be great but now is only mediocre. I’ve documented this in her last two reviews, and a little progress has been made. What would you do if you were me?”
Next, the issue owner should share background information. It is especially important to include what he or she has already tried and how it worked.
It generally requires two minutes or less to introduce the issue, without interruption from group members, which sets the stage for a focused discussion.
Step 2: Questions and answers. Taking turns to stay focused, the group takes a total of two minutes to ask questions about the situation.
Step 3: Write down responses/collect thoughts. Each participant then writes down his or her response to–or thoughts about–the situation. This step typically takes one minute. Even if all participants don’t write their responses down, this minute gives them time to collect their thoughts before speaking. Another purpose of this step is to lessen the likelihood of “group think” and to get honest exposure and a wider variety of insights.
Step 4: Share input. Each participant reads what he or she has written, a step typically requiring a total of one minute. Again, participants take turns so each participant has the opportunity to speak.
Step 5: Open discussion. The group launches into discussion to probe responses, gather more information, and come up with solutions or a combination of responses. The length of time for this step varies, based on the overall time allotted for the structured discussion. If, for example, participants agreed at the outset to share 10 minutes of their time in total, the open discussion step would last about 4 minutes.
Step 6: Summarize. The individual who owns the issue summarizes the input and shares his or her decision or inclination for action.
A Real-World Example
The process sounds fine–in writing. But what happens when you try it in reality. Here’s a true story, with names changed to protect the innocent.
Bob’s practice is fee-based, with about $70 million in assets under management. He has two support staff, plus one junior CFP advisor serving in an analytical financial planning/service role. Bob is with a broker/dealer and is a registered investment adviser (RIA). For more than a year, he has thought about whether to keep the RIA or become an investment advisor representative (IAR) of his B/D’s RIA.
Bob shares his question with an outside consultant who recommends working with a facilitator to run a structured discussion during a conference call with six other advisors–three RIAs and three IARs–to gain some perspective. All are CFPs with the same B/D, with roughly the same amount of revenue, approximately 75% of which is derived from assets under management.
Before the call, Bob made the following written statement:
I need input on potentially dropping my RIA and doing all my financial planning and consulting as an IAR of my broker/dealer through its wealth management consulting program. In the last 10 years, the regulatory burden of having an independent RIA has increased. Couple that with some facts about my past and projected advisory fees:
o I charge $10,000 or less in planning fees per year.
o In the future, I intend to charge initial planning fees and ongoing wealth management fees. I haven’t decided the amounts or projected the revenue, but I am pretty certain that it will be a lot easier administratively to charge ongoing fees using my B/D’s program because I can debit existing accounts for the fees.
Other than changing my company name (I have financial advisors in my name), what are the pros and cons of dropping my RIA and affiliating with the IAR of the B/D for my planning and wealth management fee business?
Bob reads the statement above to the group.
The six participants were told only that:
o Their input was requested on an issue which another advisor was dealing.
o No preparation was required.
o The call would run from 15 to 30 minutes.
Step 1: Share the statement. After introductions, the facilitator stated the purpose of the call: an advisor wanted input on an issue, and a structured process for discussion would be followed so that the call could be kept short. The facilitator asked Bob to read his statement.
Step 2: Questions and Answers. Immediately following, the facilitator opened the floor for questions; examples were:
o Why was Bob hesitant to change?
o What are possible names for the new firm entity?
o Has Bob spoken to compliance?
o How difficult has it been to keep up with regulations?