You probably have heard the term “chemistry” to describe the way business partners work together in a positive way. Chemistry is a quality that involves a lot more than the way partners get along and understand each other, according to Joanne Ferguson, president of Advisor Pathways Inc. in Toronto.
In business, chemistry refers to team members or partners having complementary skills and shared goals that enable the team to function efficiently. For financial advisors, that means finding an advisor whose skills are different from but compatible with your own.
“Unless you have complementary talents or skills,” Ferguson says, “you’re not going to go as far as you could.”
If you think it’s time to expand your business by forming a partnership with another advisor, consider the following strategy:
– take stock. Your initial step, before you even start looking for a partner, is to take stock of your own skills and aptitudes, Ferguson says. Ask yourself what you can provide that other advisors cannot.
It might be that you pride yourself on your attention to financial planning and the time you spend meeting with clients to explain those details patiently. If you excel in this area, avoid looking for another advisor who claims the same traits.
Your next question concerns the skills needed to help your practice expand and become more profitable, Ferguson says. Another way to consider this question is to ask yourself what tasks or objectives are not being accomplished in your practice.
For example, perhaps you are weak in Internet savvy but would like to expand your online marketing. Perhaps you should look for an advisor who has a flair for technology, marketing and social media.
Differing but complementary skill sets are what brought Marc Dalpé, discretionary portfolio manager with Toronto-based Richardson GMP Ltd. in Montreal, and his business partner, Jean-Marc Milette, together in 1998. Dalpé and Milette had known each other as students when they both studied finance. Later, they had a professional relationship when Dalpé became Milette’s investment advisor. Milette, at the time, owned a software programming company.
Dalpé understood what his practice was missing – and believed Milette could fill in those gaps. Milette’s ability to network and attract new clients impressed Dalpé. And he knew Milette’s extensive knowledge of digital technology would make up for Dalpé’s deficiencies in that area and be important to the combined practice.
“The fact that [Milette] had skills that I did not have or did not have the time to take care of made the separation of our functions very easy,” Dalpé says.
Establishing the presence of complementary skills is only the beginning of determining whether your partnership can work. You also must have an honest conversation regarding key details of your proposed partnership.
– clarify roles. Be clear about each partner’s role, says Milette. He chose to take the Canadian Securities Course and join Dalpé’s practice in part because he knew he could focus on securing new clients while letting Dalpé handle the investment-management element of client service.
“[Milette’s] job is to identify prospects, pitch to prospects and turn them into clients,” Dalpé says. “Once that prospect becomes a client, he falls into my realm. My job is to keep this client.”
And while partners can have differing skills, Ferguson says, they must have the same vision and objectives for the practice.
“You can have someone who’s really great,” she says, “but if they’re not willing to work with the rest of the team and they don’t have a common vision, then you can be in trouble.”
– define vision. Another key question for both potential partners is: what is your motivation to form this relationship? One aspect to consider is whether you truly are looking for an alliance of equals in which you will share the responsibility of making important decisions. If not, you actually might be seeking a “right-hand person” to follow through on the decisions you make, which is not a true partnership.
Ferguson recommends prospective partners write the answer to these questions – about skill sets, motivation and vision – on their own, so they cannot influence each other. Then, have a neutral, third party, such as a branch manager or a practice-management coach, read the answers aloud.
This process inspires honesty, which is a necessary step toward determining whether you and your potential partner are a fit.
“If you don’t know [these details] and you’re not candid and upfront,” Ferguson says, “that’s going to come back and bite you.”
The consequences of working with someone who is not a fit for your business will affect your clients and, therefore, the success of your business.
© 2014 Investment Executive. All rights reserved.