Learning to let go as advice leaders
With financial advice leaders often wearing too many hats in the business, two consulting professionals underscore the value of letting go and empowering staff to drive growth.
Over one-quarter of advisers operate in privately owned licensees with less than 10 staff, according to Adviser Ratings, meaning advice leaders are increasingly balancing the challenges of running a small- to middle-tier practice.
Money Management previously explored the burnout risk of mid-tier advice firms, with the directors that lead them often reporting being under intense pressure and feeling overworked.
According to two consulting experts, being an effective advice leader means recognising you can’t be all things to all people and trusting staff to complete tasks that advisers can easily do themselves.
“Letting go is one of the hardest parts of leadership,” Lana Clark, senior consultant at Vital Business Partners (VBP) owned-Elixir Consulting, told Money Management.
“We often think the hardest part about becoming a leader is knowing the right thing to do at the right time and then doing it. But in reality, the hardest part is knowing the right thing to do at the right time and then not doing it.
“For some of us, it’s easier to continue to do the job ourselves than to watch others struggle through it. This is really common for advisers, who often think ‘it’s quicker for me to do it myself than to spend the time to train someone else to do it’.”
However, this approach can lead to higher key person risk and doesn’t adequately equip junior advisers and back-office staff with the opportunity to make mistakes and grow within the business.
This is particularly relevant for those staff in their professional year (PY) as supporting younger staff through their PY as they step up from an associate role to a provisional adviser enables them to take more control in client meetings and make a stronger contribution to the business.
Clark added: “Many times, advisers will come to us saying, ‘I just can’t trust people’. Ask yourself the question about why you can’t trust them. Giving people autonomy leads them to be able to make decisions for themselves. That allows you to take a step back knowing you can trust the team to do the job effectively.”
Advisers still report experiencing trust issues in their business, both from consumers’ distrust after the Hayne royal commission and in their own staff, amid multiple ASIC adviser bannings.
Jaimie Ramsey, founder and principal consultant at Advice Business Consulting, also emphasised the importance of cultivating trust in an advice business.
“If you can’t trust the people in the roles, you’ve got the wrong people. Micromanagement is a very archaic concept – people don’t want to be micromanaged now and nor should they have to. Tell your staff the outcomes you’re looking for and let them get on with their job,” she described.
For example, delegating a project for back-office staff to optimise the firm’s usage of existing technologies will empower employees to drive change and ultimately foster trust, Clark explained.
“Everyone’s empowered, they’re trusted to make decisions together and everyone moves forward together. As a leader, our work is to coach and supervise, rather than do. We’re leading, not doing,” the Elixir consultant added.
Empowering staff can also have tangible impacts on a firm’s profitability. Elixir’s recent 2024 Advice Operations Research Report discovered that nearly half of advice businesses involve all staff in strategy planning and/or business improvement initiatives. The average earnings before interest and taxes (EBIT) for those who include staff was 25 per cent, compared to 20 per cent who relied solely upon themselves.
With advice leaders often being time-poor, learning to let go and handing over certain responsibilities to junior advice staff will enable practice principals to gain back additional time.
“The greatest asset is time, so it’s about being quite brutal with what activities you choose to spend your time on. Many advice leaders don’t invest money into hiring someone or outsourcing functions that they shouldn’t be doing. That’s the difference between a highly successful leader and ones that aren’t,” Ramsey continued.
AUTHOR
Jasmine Siljic
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