Over dinner at a steakhouse in Portland, Ore., recently, nine advisors with Commonwealth Financial Network traded stories about clients, practice management challenges and their business models. By dessert, they had decided to form a study group.
“We all operate within a 30-mile radius but there aren’t a lot of opportunities to meet except at conferences or wholesaler meetings. This is just a great way to share ideas,” notes Pat Sturr, a partner in a retirement income planning practice in Lake Oswego. “Any time you can sit down with a small group and share ideas and see what’s working, I love that sort of thing. It’s energizing and you come away with a better way to serve your client, or maybe you give someone else an idea. Everybody wins.”
Peer counseling — in the form of study groups, conference calls, even online chat rooms — has grown deep roots in the advisory community. And no wonder. While there is no definitive research to suggest it helps push advisors to new heights, the anecdotal evidence that it does is convincing.
Brent Brodeski, managing director of Savant Capital Management in Rockford, Ill., co-founded Zero Alpha Group in 1995. At the time, Savant had $40 million in assets under management. Today? The firm manages $2 billion. “I suspect we’re all materially better off as a result of being in the group,” observes Brodeski. “I can’t prove it but we went from $40 million to $2 billion — and the other firms in ZAG have very similar stories. Sure, there’s a bit of competitive spirit but mostly we just want each other to succeed.”
The groups — with rock band names like The Blind Squirrels, Next Gen and Synergy — are bound, not surprisingly, by something in common: an investment philosophy, a business model, geography or, in the case of Next Generation Advisors, the fact that members are the sons and daughters of advisors associated with Raymond James.
Overall, the groups are somewhat structured — with a couple of onsite meetings each year and regularly scheduled conference calls. Next Gen, interestingly, got its start as an online chat room on Raymond James Financial Services’ Practice Intelligence website. That forum still plays an important role in the ongoing conversation of the 30 or so young advisors who are trying to brand themselves independent of the family footprint.
ZAG, with nine member firms in the U.S., Australia and New Zealand, even has an executive director, its own website and an accountability factor that can include fines of $2,000 when a participant fails to follow through on an action item.
One overarching theme that runs through all groups, no matter the structure, is a sharing culture that gets right to the bone with firm financials, compensation arrangements, hiring protocols and operational issues. Things also get personal.
Rebecca Pomering, CEO of Seattle-based Moss Adams Wealth Advisors, belongs to a study group comprised of the decision-makers who operate the RIAs of five large regional public accounting firms. Each advisory firm has roughly $1 billion in assets under management.
“In a peer group you can say: ‘This is something I’m struggling with. I know I can talk to you about it. You can give me ideas and you will hold me accountable.’ There is this ability to show your weaknesses without repercussions,” she says. “I have a great relationship with my performance coach at Moss Adams [her boss, the president of the Moss Adams accounting firm]. But I wouldn’t go in and whine and say this or that isn’t working and that I need ideas. It’s my job to come up with the ideas.”
There are two questions that drive Pomering in this particular arena: How can I do this better? How can I raise my game as a leader?
“This isn’t a deeply charted area. This is a group of firms leading the way on how to be in the wealth management business within a CPA firm. Putting our collective heads together is going to advance us faster than if we were operating in a vacuum,” she adds. “I definitely think I’ve been able to make better decisions faster because of the input I’ve gotten from my peers.”
When solo practitioner Shannon Pitner decided she wanted to purchase new financial planning software last year, her weekly study group took on the project. The four advisors in the group road-tested three different types of software with their clients, shared their findings and then argued the pros and cons.
“It would have been impossible for me to look at all of these. We ended up picking the software we thought was best,” says Pitner, a Raymond James Financial Services advisor in Indialantic, Fla., with roughly $90 million in assets under management. “It was huge. I couldn’t have done it by myself.”
Likewise, when Raymond James advisor Linda Zivney, who heads Zivney Financial Group in Bend, Ore., began thinking about purchasing a building, adding an advisor and another assistant, she turned to her three-person study group for input.
“We talked about how to interview, questions to ask and they brought up running credit checks. I hadn’t even thought of doing that,” notes Zivney, who oversees $75 million in assets. “When you’re a solo practitioner, something like this is an invaluable resource.”