building high-performing teams: assess...3 2010 investment news /moss adams financial performance...

Building High-Performing Teams: Assess

Determining When to Expand Your Human Capital Resources


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About This SeriesBuilding a high-performing team is critical to creating a successful advisory practice. For most advisory firms, people-related

costs account for 73% of a firm’s expenses.1 Unfortunately, many Registered Investment Advisors (RIAs) don’t have a clear methodology for managing human capital and building a high-performing team, making it far more difficult to find, nurture and retain valued team members. According to TD Ameritrade Institutional’s Advisor Index Survey, advisors cite better organization as a manager, delegation and communication as their top three challenges as people managers. In addition, 82% of advisors spend less than five hours per week on staff management and human-capital-related tasks.2

Conversely, top-performing firms achieve greater productivity from managing staff with a growth-oriented mentality, remaining lean, and hiring to support growth and profitability. Top-performing firms on average experience 78% higher revenues than their peers.3

Top Human Capital Firms3 All Other Firms3 % Difference (Top vs. All Others)3

Clients 273 208 +31.2%

AUM $220.0M $142.5M +54.4%

Revenue $2.0M $1.1M +78.8%

Revenue/Professional $507.5K $435.5K +16.5%

Revenue/Total Staff $194.3K $183.6K +5.8%

Pre-Tax Owner Income $350.1K $235.7K +48.5%

Operating Profit Margin 14.8% 12.9% +14.6%

When you invest time in finding the right people and provide them with resources that can help them succeed, you’ll be on your way to creating a firm that is positioned to thrive.

1 2011 InvestmentNews/Moss Adams Adviser Compensation and Staffing Study.2 TD Ameritrade Institutional Advisor Index Survey, Q2 2012.3 2010 Investment News/Moss Adams Financial Performance Study of Advisory Firms.

LeadBuildDesignAssess

Building High-Performing Teams, developed in collaboration with Paragon Resources, is a series of modules and resources designed to help you assess, design, build and lead your human capital resources to maximize your productivity and achieve your business vision.

The series components are as follows:

1. Assess. The Assess guidebook focuses on helping you review your current team, take stock of your business and evaluate key considerations for expansion, including determining whether adding a new team member is warranted, and if so, giving you greater clarity regarding the role they would fill.

2. Design. The Design guidebook offers tips on making decisions about organizational structure, defining roles, crafting job descriptions, assessing current team members and, if appropriate, beginning the hiring process.

3. Build. The Build guidebook provides guidance on developing and maximizing your team’s human capital by presenting strategies for sourcing talent, onboarding and positioning the new team with clients.

4. Lead. The Lead guidebook presents tools you can use to enhance your management and leadership skills, helping to increase the engagement and retention of staff, streamline business operations, manage performance and implement effective team communication.

By reviewing the tools and resources in each of the four guidebooks in this series—Assess, Design, Build and Lead—you’ll be able to move through each step of the process in a straightforward, logical fashion. With this strategic approach to building a high-performing team, you’ll be able to make sure that you have the right people in the right roles engaging in the right activities, so that your business can reach its greatest potential.

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Table of ContentsAbout This Series .................................................................................................................................................................................... i

Introduction ..................................................................................................................................................................................................2

The Case for Teaming .......................................................................................................................................................................2

Expanding Human Capital Resources Has Become a Necessity ...............................................3

Self-Awareness ........................................................................................................................................................................................5

Self-Awareness Findings ...................................................................................................................................................6

Practice Assessment ........................................................................................................................................................................6

Practice Assessment Findings .....................................................................................................................................7

Setting Your Business Vision .....................................................................................................................................................7

Define and Prioritize Your Reasons to Expand .........................................................................................................9

Defining Your Reasons to Expand Your Human Capital ......................................................................9

Prioritize Your Reasons to Expand .........................................................................................................................10

Summary ......................................................................................................................................................................................................11

Appendix A: Personal Discovery Questionnaire ..................................................................................................12

Appendix B: Practice Assessment Tool ........................................................................................................................15

Appendix C: Resources ................................................................................................................................................................24

Appendix D: About the Authors ............................................................................................................................................25

Building High-Performing Teams: Assess | tdainstitutional.com 2

Introduction Human capital, or your people, is an integral part of your firm’s identity, mission and vision. According to Investment News, successful advisory firms plan their human capital programs thoughtfully and with strategic intent, aiming to achieve as much leverage as possible with each additional hire.4 As a firm evolves and matures, each additional hire should free up more time for the principal or founding partners to meet with clients and prospects.

This guidebook, the first in the Building High-Performing Teams series, focuses on helping advisors assess their current team and the key considerations for expansion. Whether you are currently a sole practitioner looking to add your first team members or an established business with a large team, the tools and resources in this guidebook are critical to build or redefine a foundation for continued success. In this phase of the process, there are three critical questions that you should consider prior to expanding your team:

1. Where do you want to be?

2. Where are you now?

3. How do you close the gap?

You will begin to identify the current gaps in your business and get clear insights on solutions to fill those voids, including the vital people who will help execute your firm’s vision and goals.

The Case for TeamingSaying the industry has changed in recent years is clearly an understatement. Teaming became popular in the financial services industry in the early 1990s. As the industry grew in complexity, advisors began to see the benefits of partnering with or hiring other financial professionals. Back then, many advisors established teams as part of their growth and client service strategies, but unfortunately, did not institute a formal due diligence process to help vet candidates and determine which would be the best fit for their firm. Support people were often added without a clearly defined role and were rarely provided with a list of responsibilities. This lack of strategic planning yielded less-than-desirable results in many cases. Research shows that there is a gap between the importance advisors place on leveraging team-based models and their confidence to execute effectively against this priority.5

4 Staffing Evolution of a Firm: The Key is Leverage, InvestmentNews, April 26, 2012.5 Applying Behavioral Attributes to Talent Management: How to Hire and Retain Best-Fit Advisors, CEB Research 2012.

69% of wealth management firms indicate teaming is a high strategic priority in their 6–12 month strategy.

Only 57% indicate they are highly confident that they can execute.

TEAMING5

A team is often defined as…

ڦ A number of persons associated in some joint action OR

ڦ A group of people working together for a common purpose

Not a Priority

41%Is a Priority

69%

Highly Confident

57%

Not Highly Confident

43%

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This guidebook provides you with the actionable information you need to execute on your team strategy. For long-term sustainable success, you must define your personal reasons for expanding your business and adding human capital to your firm.

Expanding Human Capital Resources Has Become a Necessity

Today, more advisors understand the importance of establishing teams to achieve higher levels of business success. In fact, adding new staff ranks among the industry’s top profitability initiatives.6 However, it is critical to not only understand the importance of teaming but the impact that a team can have on your business. Let’s look at a few reasons why expanding your human capital resources is no longer an option but a necessity.

THE CLIENT’S PERSPECTIVE ڦ Today’s client wants a comprehensive understanding of their financial portfolio and options without having to spend an inordinate amount of time on the nitty-gritty. This is where you bring value to the relationship and can build trust. In addition, to have the time required to provide education and frequent communication on key considerations related to their financial portfolio performance and beyond requires a team to be able to delegate non-client-facing tasks.

ڦ Clients like to know that there is more than one person behind their financial future and their money. This becomes even more important in volatile markets and times of uncertainty. If you are unavailable due to vacation, illness or other obligations, waiting can mean the difference between profit and loss, and client retention or client departure. Knowing there is a team of people who are accessible and familiar with their financial situation brings more peace of mind to today’s client.

ڦ Time has become one of our most precious commodities, leading clients to have more demanding expectations of their advisor. Clients are often looking to consolidate and simplify their financial lives. Clients who agree that their financial plan “addresses a comprehensive set of needs or goals” are 15% more likely to rate their plan as excellent as those who believe it “addresses only a narrow set of needs or goals.”7 Many want a comprehensive financial team that can handle investments, insurance, banking, trusts and legacy issues rather than discussing those concerns with several different financial institutions.

ڦ The current demographic also plays a role in the importance of establishing teams. Aging baby boomers and the sandwich generation have new and more complex wealth management situations to address. And, as life expectancies continue to increase, funding for retirement has to last much longer. Managing client relationships requires more time, knowledge and education than in the past.

Clients have a diverse set of financial needs and are seeking comprehensive, professional and trustworthy teams that can help them achieve their goals.

6 2010 InvestmentNews/Moss Adams Financial Performance Study of Advisory Firms.7 Developing a High-Quality Financial Planning Experience. CEB Research, 2011.


INVESTMENT SOLUTIONS ڦ The changing demographic has created new and exciting products. From annuities to long-term care and complex trusts, staying up-to-speed on new products and the details and rules involved takes more time than investing in traditional products. Additionally, the simplistic allocation of stocks, bonds and cash has evolved into far more diversification opportunities across an expanded set of asset classes and styles.

ڦ New circumstances and complexities within investment solutions require expanded product knowledge and expertise in today’s environment. Events in recent years have challenged advisors to think beyond traditional investing theories to help clients achieve their financial goals. In addition, with information more accessible than ever, clients are savvier, and they may want to discuss how adding new strategies may impact their portfolio.

PROCESS NEEDSڦ The industry has evolved from being idea-driven to advice-driven, and from being advisor-centric to client-centric. The days of cold-calling on municipal bonds are behind us. The fiduciary model is focused on doing what’s in the best interest of the client and continues to be the fastest-growing segment of the industry.8 In order to effectively execute this model and serve your clients accordingly, more resources are needed.

REGULATORY AND ADMINISTRATIVE DEMANDSڦ The world we live in has created the need for more rules, regulations, supervision and administration, all of which can drain your business resources. Each and every transaction, public communication and daily activity is under more scrutiny than ever. Advisors are finding it hard to balance prospecting and “client-keeping” activities with the increase in paperwork and documentation required with each client interaction.

8 Cerulli “State of the Wirehouses” – Nov ’09, “Advisor Metrics” – 2011 Update, “RIA Service Agent Survey.”

Tip: Begin by looking at your client base and asking, “What are they looking for in a relationship with our practice? What advice? What solutions? What service? What expectations?”

Taking into consideration the change in clients’ needs and expectations and the increase in the complexity of products, rules, regulations and administrative requirements, it is almost impossible for a sole practitioner to continue to grow unassisted. Expanding your human capital resources and partnering with others who have complementary talents is a natural response to this new and ever- changing environment.

The most vital element of achieving business excellence is fully utilizing the highest-quality resources. The people (or human capital) in your business are your most valuable resource because they provide the driving force behind everything you do. However, people are also the most complex resource to manage and ultimately capitalize on in a practice. In today’s competitive and ever-challenging environment,

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you need to build true value in your business and your clients. Consider taking on the mission of building a high-performance team and culture that is committed to anticipating the needs and exceeding the expectations of your clients and each other. When people come to work with a high-performance mindset, extraordinary things can happen. Clients can turn into loyal advocates, productivity and profitability can soar, work becomes enjoyable, and personal fulfillment can be achieved.

In order to determine if you are ready to build a team or expand your current team, you must first take a look at the current state and set your vision for the future. To assist you through this thought process, the remainder of this guidebook is organized into five sections:

1. Self-Awareness

2. Practice Assessment

3. Setting Your Business Vision

Self-Awareness It’s often said, “There is no I in team.” But consider that there is an “M” and an “E”—ME. Every team is made up of individuals with different skill sets, passions and motivation. In order to create a high-performance team and business, you must understand each of these areas at the individual level, and that begins with better understanding yourself.

Successful firms exhibit

superior discipline in

executing against their

strategic priorities.

According to the 2010

Investment News/Moss

Adams Financial Performance

Study of Advisory Firms,

respondents in 2007 on

average produced $900,000

in revenue. Top firms quickly

outpaced competitors,

bringing in median revenue of

nearly $1.1 million in 2009.

Driving your business vision

and success requires you to

take a step back occasionally

and ensure your resources

are aligned to help you

achieve future growth.

WHY ASSESSING THE CURRENT STATE IS IMPORTANT

Expanding human capital within the current

infrastructure

Joining forces or merging with another team or business

Changing the value proposition to a specific

focus where no additional human capital is required

Surrounding yourself with the right people with the right skill sets and experience begins with understanding your personal style, preferences and strengths as a business leader. Conducting this self-discovery often results in three possible paths:

Personal Discovery Questionnaire

Completing the Personal Discovery Questionnaire in Appendix A will help you focus on the right decision for you. It will help you think more about:

ڦ Your leadership style

ڦ Your comfort with sharing control and revenues

ڦ The areas and activities within the business that you enjoy the most

ڦ The role that you want to play

ڦ What makes you different or unique

ڦ How you define success13

Assess—The Case for Expanding Human Capital Resources

Appendix A: Personal Discovery QuestionnaireInstructions

1. Set aside some quiet time to complete the questions listed below

2. Be sure to keep in mind your:

a. Strengths and challenges

b. Passions and interests

c. Beliefs and values

d. Personality style

e. Personal desires

3. Use the space provided to write notes based on your personal situation

4. Use the self-awareness summary on page 12 to decide whether you should:

a. Expand your team/business

b. Join forces with another team/business

c. Change your value proposition to a very focused niche market where no expansion is required

LEADERSHIP STYLE, TALENTS AND STRUCTURE

ڦ Do you enjoy working with others?

Yes No Unsure

ڦ Do you want to be the sole decision maker with or without others’ input?

Yes No Unsure

ڦ Do you enjoy collaborating with others and making shared decisions?

Yes No Unsure

ڦ Can you share control?

Yes No Unsure

ڦ Do you want your clients to see you as the lead advisor and expert?

Yes No Unsure

ڦ Are you comfortable sharing your clients with another advisor?

Yes No Unsure

4. Define and Prioritize Your Reasons to Expand

5. Summary


For each of the core areas of your business you will need to assess:

ڦ Time spent

ڦ Resources available

ڦ Gaps in coverage

ڦ Training requirements

Self-Awareness Findings

Take some time to review your responses to the Personal Discovery Questionnaire and with your newfound self-awareness, consider whether you should:

ڦ Expand your team/practice. Example: Did your answers show that you want someone else to run the day-to-day operations while you maintain your role as lead advisor?

ڦ Join forces with another team or firm. Example: Did your answers show that you want to partner with another advisor to collaborate with and share clients?

ڦ Change your value proposition to a focused niche market where no expansion is required. Example: Did your answers show that you are most fulfilled working with physicians and by focusing on that market alone you do not need to add staff?

Armed with the answers to the above questions, your next focus should be on assessing your practice.

Practice AssessmentWith a personal understanding and path identified, it is now time to evaluate the business itself and assess how it is performing within each core area. With the increased complexity in a financial services business, you should break down the different areas of your practice in order to thoroughly assess performance. The following is an example to get you started. However, be sure to customize this to your firm’s core business areas.

SAMPLE CORE BUSINESS AREAS OF AN ADVISORY FIRM

Business Function Description

Client Acquisition All activities related to identifying new ideal clients, bringing in additional assets and

generating new revenue...

Products and Services All activities relating to the line of solutions you provide to your clientele...

Client Service All activities that address both the reactive and proactive service you provide in

your business...

Administration and Operations All activities that relate to paperwork, proposal generation, workflow, internal

correspondence, etc.

Business Management All activities that relate to proactively managing your business, such as business

planning, segmentation, professional development, budgeting, etc.

ڦ Systems and processes

ڦ The client experience

ڦ How this area of your business affects overall performance

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A practice assessment will then lead you to decide whether to:

Practice Assessment Findings

Whether you decide now is the time to expand your team or you first need to strengthen your infrastructure, you will need to build out your team, internally or virtually, in order to continue to grow your firm. Have you concluded that you need to expand your team? Or, have you found that you first need to focus on building a stable business foundation? If you’ve concluded that it is time to expand, you are almost ready to begin building your high-performing team. First, you must document and commit to paper the decisions that you have made based on the analysis you have conducted. Consider your specific reasons for expansion of human capital. Remember, there are multiple reasons for expanding your people resources. Using the findings from the Personal Discovery Questionnaire (Appendix A) and the Practice Assessment (Appendix B), the next step is to set your business vision.

Setting Your Business VisionHaving completed your self-awareness and practice assessment exercises, it is now time to set your vision for the future of your business. The vision provides team members with an inspiring glimpse of where you are trying to lead them.

As you begin this exercise, you might consider:

ڦ Your specific reasons for expansion of human capital. Remember, there are multiple reasons for expanding your people resources. Your reasons for expansion should directly align with the vision for what you are trying to achieve as a business.

ڦ Your purpose as an advisor. Here you might consider your philosophical beliefs about the financial services industry, the values that are important to you as a business owner and financial practitioner, and your principles of investing—what are you trying to accomplish?

ڦ The benefits of forming a new, improved entity from your clients’ perspective. Here you should delineate the specific benefits that your clients will receive as a result of putting the pieces in place to achieve your new business vision. Perhaps it is an increase in service deliverables, more depth of product offerings or a new, specialized financial services solution. What your clients will experience is a vital part of setting a vision that can be materialized.

Tip: For a full list of TD Ameritrade Institutional Resources that can help you with the core building blocks of an advisory firm, see Appendix C.

Reduce workload (what you do for your clients and how many

you do it for)

Renovate your business by minimizing inefficiencies and systematizing the practice

Increase capacity by adding more human capital or

team members

Practice Assessment

The Practice Assessment tool in Appendix B will help you thoroughly assess your current practice and uncover the areas that need to be cleaned up or systematized. You will review your:

ڦ Business model

ڦ Decision making

ڦ Clients

ڦ Systems and processes

ڦ Self-sabotaging behavior that impacts your ability to achieve your goals


ڦ The definition of your ideal client relationship. Understanding your particular target market, niche or ideal client is critical to your vision and all aspects of your business including your new client acquisition, marketing plan and segmentation strategy, to name a few. Utilizing a questioning technique can be a great starting point:

?Who are your ideal clients now ڦ

?What specific attributes are common among your best clients ڦ

How do you define them in regard to profitability, asset levels or ڦrevenue potential?

?What client qualities are important to the team ڦ

?Why do you like working with certain clients over others ڦ

ڦ Your unique value proposition. As you continue to set a vision for your practice, you must also commit your value proposition to paper. In an industry that is increasingly commoditized, investors can buy or sell almost any product from any type of firm, so you must be able to answer questions such as: What makes you and your business different? Why should I do business with you? As you review your current value proposition, elevator speech and story, you should include answers to these five key questions:

1. Who are you? 4. How do you do it?

2. What do you do? 5. What makes you

3. Who do you do it for?

ڦ Your marketing plan. A marketing plan is the life blood of a growing practice. How are you currently marketing your practice? What is your strategy for methodically connecting with prospects fitting your ideal client profile?

ڦ Your team culture. Whether a large or small firm, understanding your culture is important in attracting and retaining both clients and team members. What are your firm’s core values? What types of individuals are successful at your firm?

ڦ Your definition of success. Success means something different to each individual. And within an individual’s definition of success, there are distinct factors such as compensation or a passion to help people reach financial fulfillment. There are an unlimited number of definitions for success—it is important to define yours as you look to create your business vision. What are you working towards? What does professional success look like for you?

A clearly defined business vision is critical in setting a foundation not only for building a high-performing team but also for business and marketing planning, the client experience, and more. With a clear business vision, you can now define and prioritize your people resource needs.

ADDITIONAL RESOURCES

Resources from TD Ameritrade Institutional to help you think through your service model and unique value proposition:

Client Segmentation and Service Model Strategies Guidebook and Excel Tool is a

comprehensive guide which provides a

methodology for

segmenting your clients

and creating a client

service model that

optimizes your current

capacity and meets

individual needs.

In addition, it will provide

step-by-step instructions on how to use TD

Ameritrade Institutional’s Client Segmentation and

Service Model Tool designed to help you

efficiently segment your client base and assign

appropriate service models.

An Advisor’s Guide to Marketing. This

guidebook will challenge

you to think about your

current marketing

strategy and offer best

practices for creating a

marketing strategy and

tactical growth plan that

is specific to your

business needs including

a step-by-step process:

1. Develop Your Business Plan

2. Create Your Value Proposition

3. Create the Right Marketing Strategy

4. Build Your Marketing Plan

5. Implement Your Marketing Plan and Measure Results

To access these guides and Excel tool, visit Veo>Resource Center>Practice Management.

different?

An Advisor’s Guide to Client Segmentation and Service Models | tdainstitutional.com 14

Appendix A: TD Ameritrade Institutional Client Segmentation and Service Model Tool

Introduction

As part of our ongoing commitment to providing practice management support to our advisors, TD Ameritrade Institutional has developed a Segmentation and Service Model Tool to help you efficiently segment your client base and assign appropriate service models. The tool utilizes a straightforward methodology that will help you leverage both quantitative (e.g., assets, revenue and ROA) and qualitative (relationship, future potential and referral source) data that can inform your client-retention and business-growth strategies while potentially improving your resource allocation.

To access the tool, please contact your Strategic Relationship Consultant or visit Veo>Resource Center>Practice Management>Client Service to download the tool directly.

Overview

ThisExcel-basedtooliscomprisedofsixseparatetabswhichallowyoutoenterinformationforeachindividualorhouseholdto help you determine an appropriate tier for your clients including:

ڦ Tab 1: Overall Segmentation

ڦ Tabs 2–5: Suggested service model components for each tier

ڦ Tab 6: Service Options (including customizable tier threshold definitions)

The following is a detailed explanation of each tab and step-by-step instructions on how to fill in the required information.

Tab 1: Overall Segmentation—There are four basic sections on the first tab of the spreadsheet.

Section 1 Section 2 Section 3 Section 4

ڦ Section 1: Tier and Client Name—The “Tier” is automatically calculated using the data you input into the tool. The “Name” column refers to the household name, not the individual account names. As noted in the guide, a best practice is to conduct the segmentation at the client or household level rather than the account level, as there may be multiple accounts for each household.

Segmentation Criteria Profitability Indicators Service Matrix

Tier Name TOTALSCORE AssetScore Revenue Relationship Assets Revenue ROA ClientReviews Check-InCalls LeadAdvisor Score Score

A Smith 12 4 4 4 $12,229,127 $69,780 0.57% 4 8

A Cohen 12 4 4 4 $3,142,579 $26,442 0.84% 4 8

B Jones 9 4 2 3 $1,178,221 $2,121 0.18% 2 4

A Hill 10 3 4 3 $817,521 $7,915 0.97% 4 8

C Scott 8 2 2 4 $417,348 $2,367 0.57% 1 3

C Wilson Trust 7 2 3 2 $312,838 $3,343 1.07% 1 3

D Harris 5 1 1 3 $102,109 $252 0.25% 0 2

D Stone 4 1 1 2 $82,038 $57 0.07% 0 2

An Advisor’s Guide to Marketing | tdainstitutional.com 26

Appendix A: Marketing Strategy Worksheets

CLIENT REFERRALS

What are we doing now to generate client referrals?

What is working well?

Who is referring to us?

Who do we believe should be referring?

What tools do we give to our clients to allow them to refer others?

What other tools should we create?

How can we tell our story more effectively to our clients?

How can we educate our clients about the types of people we serve?

What can we do to put a focus on client referrals besides “just ask”?

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Define and Prioritize Your Reasons to Expand

Defining Your Reasons to Expand Your Human Capital

Although creating a team is typically some function of “time,” it is essential that you clearly define your purpose and reasons to expand your human capital. This will subsequently help create the team’s vision and mission. The purpose must be abundantly clear from the onset and then communicated as the team begins to take shape so that everyone understands the common goals of the team as well as their individual responsibilities. The purpose will clearly help define the roles and subsequently find the right people to fill them.

With 21% of all advisors over the age of 60 and an average Registered Investment Advisor age of 51, many are looking to team as part of a business succession plan.9 For others, the goal may be to deepen the level of service they provide. In other cases, it may be about expanding their offerings to their clients. These three goals will lead to looking for three very different individuals with very different talents and backgrounds. The purpose for teaming must be identified up-front. The exercises in this guidebook allow you to perform some analysis on your current business and client base. Your findings will help you define your reasons for expanding human capital resources.

You may be thinking that you already know what areas of your organization need help. For example, recruiting is your biggest challenge and you are looking for help sourcing talent. You may be tempted to skip directly to that section of this series. However, taking the time to first move through the Assess phase is critical for your long-term success. While there is no doubt that you know your business better than anyone else, stepping back and evaluating your practice holistically can provide additional insights you may not have had time to previously consider.

DEFINE YOUR REASONS TO EXPAND

ڦ Increase service to client relationships

Yes No

ڦ Allocate more time to focus on marketing and new client acquisition—expand practice

Yes No

ڦ Expand wealth management offerings

Yes No

ڦ Allow someone else to run the business

Yes No

9 Cerulli Advisor Edge Q3 2012.

ڦ Increase revenues

Yes No

ڦ Change value proposition

Yes No

ڦ Spend more personal time with family and life interests

Yes No

ڦ Succession planning

Yes No

ڦ Other


Prioritize Your Reasons to Expand

Having spent time defining your reasons to build a team, you should now consider which are most important to you. Use the activity below to prioritize your reasons for expanding your team. This could affect future decisions as you walk further down the road to expanding your team.

REASON FOR EXPANDING YOUR TEAM RANK ORDER PRIORITY

1 = Most Important to You 6 = Least Important to You

Succession planning 1 2 3 4 5 6

Increase service to clients 1 2 3 4 5 6

More time for marketing and new client acquisition 1 2 3 4 5 6

Expand wealth management offerings 1 2 3 4 5 6

Allow someone else to run the practice 1 2 3 4 5 6

Increase revenues 1 2 3 4 5 6

Change value proposition 1 2 3 4 5 6

Spend more personal time with family 1 2 3 4 5 6

Add your own

1 2 3 4 5 6

1 2 3 4 5 6

1 2 3 4 5 6

1 2 3 4 5 6

1 2 3 4 5 6

1 2 3 4 5 6

1 2 3 4 5 6

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SummaryFocusing on your human capital resources is one of the most effective ways for you to grow your business and provide added value to clients, but there is no “one size fits all” solution. Many considerations in the development of the team can make or break the long-term success of the business. This guidebook is part of the Building High-Performing Teams series to help you assess, design, build and lead your team. This guidebook presents the high-level considerations and action items that you should work through in deciding how to grow your team. The tools and resources included in this guidebook will help you through each step in the process. Refer to these exercises as you move forward in the series. In the Design, Build and Lead guidebooks, you will be introduced to additional exercises to help ensure that you maximize your human capital resources and build a high-performing team. To access the full series, visit Veo>Resource Center>Practice Management>Human Capital.

ASSESS CHECKLIST

Conduct Self-Awareness

Consider why you want to expand your business and bring on additional team members.

Assess where your time is being spent.

Consider your favorite and least favorite activities. What are you willing to delegate?

Consider your leadership style.

Define what personal and professional success looks like for you.

Use assessment resources to gain an understanding of your true strengths in the business and your personal motivations.

Analyze Your Business

Take inventory in each area of your business and assess the gaps.

Assess your value proposition. Perform a gap analysis on the products and services that you offer now and those you would like to offer in the future. Keep in mind the extent and depth of your clients’ needs.

Assess your current level of client satisfaction. Are you meeting, falling short of or exceeding their expectations?

Assess the use of current resources. Are you maximizing everything available to you?

Define Your…

Reasons for expanding

Priorities

Commit to Developing Your Organization


Appendix A: Personal Discovery Questionnaire

Instructions

1. Set aside some quiet time to complete the questions listed below.

2. Be sure to keep in mind your:

a. Strengths and challenges

b. Passions and interests

c. Beliefs and values

d. Personality style

e. Personal desires

3. Use the space provided to write notes based on your personal situation.

4. Use the self-awareness summary on page 11 to decide whether you should:

a. Expand your team/business

b. Join forces with another team/business

c. Change your value proposition to a very focused niche market where no expansion is required


ڦ Do you enjoy working with others?

Yes No Unsure

ڦ Do you want to be the sole decision maker with or without others’ input?

Yes No Unsure

ڦ Do you enjoy collaborating with others and making shared decisions?

Yes No Unsure

ڦ Can you share control?

Yes No Unsure

ڦ Do you want your clients to see you as the lead advisor and expert?

Yes No Unsure

ڦ Are you comfortable sharing your clients with another advisor?

Yes No Unsure

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GENERAL PERSONAL AND PROFESSIONAL QUESTIONS

ڦ Are you comfortable sharing revenues with another advisor?

Yes No Unsure

ڦ Are you looking to provide direction for the business but have someone else run the day-to-day operations?

Yes No Unsure

ڦ What are your strengths in the business?

ڦ What activities and areas do you most enjoy in the business?

ڦ What are your least enjoyable activities?

ڦ Where are your challenges/weaknesses in the business?

ڦ Do you live to work, or work to live? Do you truly have a passion for what you do or is it more of a means to an end? Consider your personal motivation.

ڦ Do you feel you are fairly compensated for what you do?

Yes No

ڦ How do you want to be known? (As a specialist, generalist, by client type, by client size, etc.)


GENERAL PERSONAL AND PROFESSIONAL QUESTIONS

ڦ What role do you want to play? (Investment specialist, insurance specialist, financial planner, etc.)

ڦ How do you want to grow professionally?

ڦ You are most motivated or fulfilled by/when...

ڦ You define personal success as...

ڦ You define professional success as...

ڦ Is your work helping to fulfill you personally?

Yes No

ڦ Additional thoughts or notes on:

ڦ Strengths and challenges

ڦ Passions and interests

ڦ Beliefs and values

ڦ Personality style

ڦ Personal desires

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Appendix B: Practice Assessment Tool

Instructions

All individuals who participate in your business should be included in this activity. You should work through this activity together as it will be easier for you to identify any gaps in your business model.

This tool has two parts: 1) assessing the current gaps in your business model and, 2) closing those gaps prior to adding any new team members. When thoroughly completed, this activity can provide multiple benefits, such as:

ڦ An increase in current business awareness of what you have now, what is missing, and where you are spending your time and resources

ڦ A foundation for determining decisions or actions that may need to take place prior to expanding your team

ڦ A specific action plan that cultivates future success

Consider each of the core areas of your practice such as:ڦ New client acquisition

ڦ Products and services

ڦ Client service

Note: As you work through the exercise, consider what you have now and what you should have in place to successfully expand your team, including:

ڦ Identify the elements that are already in place and consistently working well.

ڦ Identify the elements that need to be adapted or fine-tuned.

ڦ Identify the elements that are missing completely and need to be created.

ڦ Consider whether you are using all of the resources currently available for each area.

Once you have made note of your initial thoughts on each area, go back through the worksheets and prioritize the areas that are most in need and can be improved with the right team infrastructure in place.

Keep in mind the following concepts:

A. Can you reduce your current workload? Consider what you do for your clients and the total clients you serve. Is there anything that you can do to reduce either?

B. Can you increase efficiency within your current business? Consider all repetitive activities and be sure that you have a system in place that creates economies of scale so you maximize your time each day.

C. Can you do what you want for your clients based on current capacity? When you have accomplished items A and B above and the answer to question C is a resounding “no,” then it is time to increase capacity and expand your team.

ڦ Administration and operations

ڦ Business management


A. SPECIFIC TO THE NEW CLIENT ACQUISITION AREA OF MY BUSINESS...

Practice Assessment Tool

Am I spending enough time in this area? Yes No Explain:

What resources do I have?

What gaps or needs do I have in this area?

Do I have the necessary training in this area? Yes No Explain:

Do I have systems and processes set up in this area?

What do my clients experience in this area? Are we meeting, falling short of or exceeding expectations?

I rate my overall effectiveness in this area as: Excellent Good Fair Poor Explain:

Should I challenge the decisions I have made in this area?

Client Acquisition Inventory

Written, defined ideal client profile

Elevator speech and value proposition

Printed and electronic brochure

Client acquisition strategies (including referrals, organic growth, traditional marketing, etc.)

Written marketing plan

Library of materials (including drip marketing, email marketing, direct mail, newsletter, education articles, website, seminar presentations, radio/print ads, press releases, market demographics, pipeline tracking tool, compliance officer contact information and procedures, etc.)

17


B. SPECIFIC TO THE PRODUCTS AND SERVICES AREA OF MY BUSINESS...









Products and Services Inventory

Insurance products

Cash/debt management services

Financial planning

Educational planning

Retirement planning

Estate planning

Strategic alliances (to supplement wealth advisory services)

Account choices (commission vs. fee based, etc.)


Detailed Products and Services Assessment

As you think about your business, consider what you offer your clients now and what you would like to offer them in the future. The items provided below are a starting point—be sure to customize this list to reflect your business model and vision.

PRODUCT/SERVICE CURRENT OFFERING FUTURE OFFERING NO LONGER WISH TO OFFER

Financial Planning

Equities

Fixed Income Products

Mutual Funds

Annuities

Managed Money

ETFs

Alternative Investments

Options/Futures

Cash/Debt Management

Certificates of Deposit

Unit Investment Trusts

Educational Planning

Retirement Planning

Estate Planning

Insurance: Life

Insurance: Long-Term Care

Insurance: Disability

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PRODUCT/SERVICE CURRENT OFFERING FUTURE OFFERING NO LONGER WISH TO OFFER

Wrap Accounts

Commission Accounts

Fee-Based Accounts

Retirement Plan Accounts

Retirement Plans [401(k), 403(b), etc.]

Retirement Plan Administration

Dividend Reinvestment Programs

Strategic Alliances (To Supplement Wealth Services)

Operational Excellence

Reactive Service Excellence

Proactive 5-Star Service

Concierge Services

Add Your Own


Client Service Inventory New client on-boarding process

Client portfolio review meeting system

Other client meeting tools: agendas, checklists, scripts

Client educational items: seminars, webinars, articles of interest, audio recordings, etc.

Client feedback system

Tracking tool for incoming client requests: contact management system

Client communication plan

Client appreciation plan

Client experience plan: telephone protocol, office environment, greeting procedures, etc.

Value-based client communication library: standardized and customizable content, educational resources, product resources, etc.

Ongoing client fact-finder

Compliance tracking tool: funds spent on clients

C. SPECIFIC TO THE CLIENT SERVICE AREA OF MY BUSINESS...









21


Administrative and Operations Inventory

Client documentation procedures (preparing, collection, processing, filing, storage, retrieval)

Account maintenance procedures

New account paperwork Change beneficiary, change address, etc. Delinquent paperwork

Statement processing Letters of authorization Year-end paperwork

Operational procedures

ACATs Trading

Annuity administration Margin

Cost basis Operational checklists, etc.

Outgoing: Checks/Wires/ACH IRA and other retirement plans

Adherence to compliance procedures (including regulatory mailings, electronic communication protocols, privacy notification, etc.)

D. SPECIFIC TO THE ADMINISTRATIVE AND OPERATIONS AREA OF MY BUSINESS...









Internal transfers and other distribution requests, etc.

Reorg

Incoming: Checks/Wires/ACH


Business Management Inventory

Activity-based business plan: vision, goals, strategies, tactics, ownership, deadlines, etc.

Client segmentation and migration plan

Professional development plan: continuing education, training events, coaching, etc.

Hiring, selection and on-boarding processes

Job descriptions

Individual and team performance reviews

Internal team meeting plans: daily huddles, weekly, monthly, quarterly, annual meetings

External/internal partners development plan: attorneys, CPAs, bankers, business coach, marketing department, clearing/operational departments, etc.

Technology resource management: software, hardware, subscription services, proposal generation, financial planning software, performance analysis software, etc.

Office procedures: task management, mail, supplies, phone coverage, calendar and scheduling, etc.

Fiscal management: to include income and expense reporting for the practice

E. SPECIFIC TO THE BUSINESS MANAGEMENT AREA OF MY BUSINESS...









23


ITEM FOR IMPROVEMENT CURRENT STATUS OWNERSHIP PRIORITY Complete Current Member High In Progress Proposed New Role Medium Needed Low

Closing the Gaps

Now that you have made notes of your initial thoughts on each area, go back through the worksheets and prioritize the gaps of coverage and areas that are most in need and can be improved with the right team infrastructure in place.


Appendix C: ResourcesTD Ameritrade Institutional offers additional resources to help you uncover potential opportunities to service your clients and exceed their expectations.

ڦ Dedicated Strategic Relationship Consultants: These focused professionals understand your business and strive to deliver personalized solutions to help meet your unique needs and goals. Call on their innovative thinking to help you create an action plan designed to move your business forward.

ڦ Roadmap: Whatever your business needs, our Strategic Relationship Consultants are ready to help you take your business to the next level. We use an innovative online planning tool called Roadmap to translate your high-level business objectives into action plans.

ڦ Affinity Services Program: We have established relationships with more than 100 renowned third-party service providers to bring you third-party solutions to help run your business, manage your clients’ wealth and maximize your business—all at preferred rates.

ڦ Guidebooksڦ An Advisor’s Guide to Marketing—This guidebook offers best practices for

creating a marketing strategy and tactical growth plan that is specific to your business needs including a step-by-step process to:

1. Develop Your Business Plan

2. Create Your Value Proposition

3. Create the Right Marketing Strategy

4. Build Your Marketing Plan

5. Implement Your Marketing Plan and Measure Results

ڦ Client Segmentation and Service Model Strategies Guidebook and Excel Tool

ڦ An Advisor’s Blueprint for Soliciting Client Feedback and Driving Growth

Please work with your TD Ameritrade Institutional Strategic Relationship Consultant to help uncover opportunities and learn how you can help take your business to the next level.

25


Appendix D: About the Authors

About Paragon Resources and Know No Bounds

Paragon Resources and Know No Bounds are training and consulting firms providing proven practice management solutions exclusively to Investment Professionals. Whether an internal corporate business development department, product solutions provider or a practicing advisory team, our resources are designed to capitalize on people’s talents and optimize productivity through efficient processes. This is the foundation of our People + Process = Performance™ methodology.

Having a keen awareness of the true root cause of an investment advisory team’s issues is vital to remaining competitive in this evolving industry. We provide a powerful and unique suite of diagnostic tools designed to:

ڦ Identify the potential performance barriers that are hindering the ultimate success of an advisory team

ڦ Facilitate key decisions that need to be made for the future growth of the practice

ڦ Provide a roadmap for specific action

By looking at three critical Performance Drivers—PEOPLE, TEAM DYNAMICS and the BUSINESS MODEL—our resources and services help advisory teams transcend their current success to attain their ultimate performance potential. Organizations increase their business, optimize their practices, and subsequently make an impact on their lives and those of their clients.

For additional information, please visit our websites at www.ParagonResources.com or www.KnowNoBounds.com.

About TD Ameritrade Institutional

At TD Ameritrade Institutional, we never forget that it’s your business. We are here to support you in making it thrive. When you work with us, you will get the dedicated commitment of our people, access to a range of resources and a strategic relationship—all designed to increase your potential and help you achieve your business vision. Our offering is part of what differentiates us. We deliver smart operational solutions, innovative technology, customized practice management and flexible investment solutions, all with one goal in mind—impeccable service.

We share your belief that being a fiduciary is one of the best ways to serve your clients. As steadfast advocates for independent advisors, we continually speak out to ensure that your needs and the needs of investors are always considered within the regulatory environment. We consistently place your needs at the foundation of our business decisions. You can count on TD Ameritrade Institutional to put you first, so you can do the same for your clients. When you choose to work with us, you’ll see how deeply we are committed to your success.


NOTES:

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NOTES:


NOTES:

Building High-Performing Teams: Assess | tdainstitutional.com

Important Information This material is designed for a financial professional audience, primarily registered investment advisors. This brochure is published by TD Ameritrade Institutional for informational purposes only and should not be construed as legal or professional advice. TD Ameritrade Institutional disclaims any loss or liability that is incurred as a consequence, directly or indirectly, from the use or application of this publication. Third-party articles and information are obtained from sources deemed reliable; however, TD Ameritrade does not guarantee their accuracy or completeness and makes no warranties with respect to results to be obtained in reliance thereon. TD Ameritrade does not make recommendations or endorsements for any advisor that utilizes its brokerage or custodial services. TD Ameritrade does not monitor, and is not responsible for, communications between advisors and their clients. TD Ameritrade, Paragon Resources and Know No Bounds are separate and unaffiliated, and are not responsible for each other’s services or policies.

Paragon Resources is a third-party provider in the TD Ameritrade Institutional Affinity Services Program. Access to Affinity Services Program vendors is provided solely as a service to financial advisors using the brokerage, execution and custody services of TD Ameritrade Institutional. These services are offered at a discount directly through the participating vendors. Participating vendors are independent and are not employees or agents of TD Ameritrade. TD Ameritrade does not guarantee nor are they responsible for the quality or accuracy of any vendor’s product or service. In no instance should the listing of a vendor be construed as a recommendation or endorsement by TD Ameritrade. Furthermore, TD Ameritrade does not recommend or endorse any security described by any vendor.

Access to Roadmap is provided as a service to financial advisors using the brokerage, execution and custody services of TD Ameritrade Institutional. TD Ameritrade and ActiFi, Inc. are separate, unaffiliated companies and are not responsible for each other’s services and policies.

TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC/NFA. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2012 TD Ameritrade IP Company, Inc. All rights reserved. Used with permission.

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