During periods of great change, leadership emerges. Arguably, through the past 22 months, the financial services industry has seen more change than in any previous period. At ClientWise, our research barometer–based on the continuous research we conduct with our coaching clients–has revealed the critical role of leadership within advisory practices. Indeed, within our coaching sessions this theme continues to surface time and again.
Take for example, Mark Tibergien’s insightful comments in the May 2010 edition of his popular Formulas for Success column in Investment Advisor– “The Dispensable Leader.” Tibergien contends that many independent financial advisory firms face a looming “crisis of leadership” as entrepreneurial founders struggle to release control of the firms they have built.
For advisors, “leadership” is a vital quality. As the stature and credibility of the largest brokerage firms has shrunk, it has become even more important that individual financial advisors demonstrate their own leadership.
We work with many such advisors who are seen as leaders within their chosen communities. What is perhaps most interesting is that, during tumultuous market periods, clients tend to gravitate towards advisors they perceive as “advisor-leaders.” Moreover, through ClientWise research, we have observed a number of characteristics that such top-performing advisor-leaders tend to share.
We’ve found that advisor-leaders:
o Are more visionary, providing their teams perspective and context while reinforcing their firm’s overarching values.
o Are more participative, engaging colleagues and clients in critical discussions and decisions.
o Are more effective coaches themselves, for both their peers and clients.
The Five Types of Advisor-Leaders
For advisors, leadership manifests itself in five different areas: brand leadership, altruistic leadership, business leadership, mentoring leadership, and community leadership. These categories are not mutually exclusive. Often, an activity will straddle two or more of these five categories.
Before we get into that, however, it’s time for some definitions:
o Brand Leadership. Under this heading we find activities that might be in the typical advisor’s marketing plan. Brand leadership activities are community outreach efforts that are pretty directly related to connecting to organizations and individuals, which in turn will lead to new client relationships. Example: Join a nonprofit board and play an active role. Coaching Question: Which activities could you initiate that would further your desired brand?
o Altruistic Leadership. In this group we include participation in activities that may be philanthropic or humanitarian in nature, but are not consciously undertaken to find, or drive, business. However, advisors who lead altruistic activities often experience benefits to their business and brand. Example: Take a “volunteer vacation” (e.g., work for a charitable organization overseas). Coaching Question: Which charitable organization or cause holds your passionate interest enough to get you more involved?