But unfortunately , without individual responsibilities and accountability , we are all known to fail easily .

Consider this MIT experiment : In one class , professors randomly assigned their students to three groups — one had a teacher-assigned deadline for a paper . The second group could choose their own deadline , which they would be held accountable to , and their grades were lowered as a penalty for late papers . Finally , the third had no deadline at all , submitting the paper when they could before the end of the semester .

Importantly , the group with the self-selected deadline did better than the no-deadline group but worse than the group with the teacher-selected deadline . As it turns out , we do better when someone is looking over our shoulder . Perhaps we should apply that concept to growth .

Yet we don ’ t . We don ’ t create mechanisms of accountability , and we set goals that are doomed to fail . What is more , we prefer to hide from the growth conversation and simply hope that things will work out .

I understand why firms are afraid of targets for individuals . Insurance firms were doing that , and it was seen as pressuring their agents to sell more , perhaps at the expense of their clients . Wirehouses were doing that , too , and perhaps their sales competitions degraded the professionalism of the advisors and promoted the profile of those who put more assets in products rather than kids in college and retirees in lounge chairs . Sales pressure is not consistent with fiduciary professionalism .

The concern is understandable but overblown . What team sport does not track individual statistics ? They all do : All

Individual Growth Targets For Advisors

Do you set individual business development targets for advisors / wealth managers ?

■ Yes 42 %

■ No 58 %

They say that success has many parents and failure is an orphan . This is certainly true with growth . We struggle with it , and we are disappointed by it , but no one wants to be responsible for the outcome or the change .

modern team sports compile enormous amounts of individual data to tell them who makes the greatest impact . They do it to identify what strategies work best and what players contribute the most . They do it to identify what skills players need to develop .

The most common concern is about a firm ’ s culture . The worry is that if a firm asks each of its professionals to bring 10 clients in next year and keep some statistics on who brought what , the firm will turn into a multi-level market scheme that peddles advice .

But that idea can be taken too far . While it ’ s certainly true that every measure of performance has an impact on behavior , simply measuring the number of new clients is very far from turning an advisory firm into a car dealership .

The Anti-Growth Myths

Without accountability , we ’ re creating dangerous myths , and we perpetuate them to the detriment of young professionals .

One of these is the legend of “ the financial advisor who is amazing at working with clients but is not a good business developer .”

Most client opportunities come from referrals — the data says clearly that more than half our leads come from existing clients . So how is it that someone can be doing an amazing job with 125 clients and not also be growing the group ?

A doctor without a patient is not a doctor , just a person with a diploma . It ’ s the patient who makes a doctor . Likewise , to be an advisor you need clients to help . A professional who is consistently onboarding new clients is always exposed to new

This is not to suggest that professionals should each be ending every meeting with “ We are looking to grow . … Do you know someone else who can benefit from the amazing work that we do ?” This kind of speech can kill the enthusiasm of even SpongeBob .

We usually hope that referrals come unsolicited from the amazing job we ’ re doing . But perhaps even here we don ’ t do as good a job as we could . Our study shows retention of AUM at 98.6 % from last year , yet that ’ s a low standard since retention simply means that clients aren ’ t motivated enough to change . They may need something else in order to refer .

What Happened To Business Developers ?

The dissatisfaction with the growth results has driven many firms to explore the possibility of hiring business developers who specialize in growth so that the “ service-oriented advisors can focus on service .” The idea is sound on paper , but it doesn ’ t stand scrutiny when we examine the data .

Very few organizations use business developers , and when they do the results are underwhelming . In our survey , only 10 % of all firms had a business development officer position . ( Firms that use such an officer while also using custodial referral programs are an important exception .) That ’ s because , as I ’ ve noted already , service and advice should be connected .

JULY / AUGUST 2024 | FINANCIAL ADVISOR MAGAZINE | 17