Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Bev,
We are two very successful female advisors now working together, but we had very different practices and approaches with our clients. We identified this during the “dating” process and knew it would be something we would need to reconcile. One of us is a very thorough planner and puts a lot of emphasis and rigor into the planning process; the other is more of an investment person who likes to meet with fund managers and consistently watch the market and rebalance accounts.
I am writing this so you won’t guess which one is me and which one is my partner, “Sally.” We talked about our different viewpoints, shared client backgrounds during which we could see how the differences play out in who makes an ideal client for each of us and then agreed once we had merged practices, we would deal with how best to integrate our differing styles.
Now that we have been together for nine months, I asked Sally when she wanted to sit down and look at our client experience to see where we blend our approaches. She got huffy, told me she was busy and her approach and style with her clients was working fine, and she didn’t see a need to shift. I was taken aback, which I told her, and reminded her how often we had talked about blending our approaches. She said my approach would be disruptive to her clients and there was no reason for us to do this.
Then she said she saw an opportunity for new clients to choose which approach they liked better and work with the one of us who fit their needs the best.
I am reeling. I never would have merged if I’d known she had no intention of collaborating and adapting. I am feeling taken advantage of and not sure where to go from here. We merged because I wanted to be in a partnership doing better things for my clients. I could have stayed siloed if this was to be the outcome.
Sally is 49 and I am 61 years old. Yes, I was also hoping for a successor. Maybe Sally thinks she can just wait me out (I want to retire in eight years) and then do what she wants. What options do I have? Please put me as anonymous as I know Sally also reads Advisor Perspectives on a regular basis and could come across your column.
Anonymous
Dear Advisor,
It is too late to mention that these things should be worked out in advance of the deal rather than having a conversation with a friendly handshake, saying you will deal with it once we are joined! Your practices were very different, and you knew this before you ever came together – you discussed it! This type of thing doesn’t magically change simply because you are now joined and (I assume) working under one name and as if you are in partnership together. I know this sounds like me berating you for something you can’t fix, but it’s important for me to say it for other readers who may be considering merging. You must address client engagement, investment strategy, planning philosophy and how you will shift any differences between practices before you end up on the other side of the agreement.
You thought talking about this together was enough, and you trusted each other and knew it was important to get the deal done and then address these issues after the fact. Now the trust has been broken on your end, and possibly Sally’s too, and you are stuck.
You have options but they are limited:
- You don’t state in your note whether you are going to all your combined clients and sharing a new name and a new operating philosophy. Given your structure, you don’t have to do this. You could remain in your silos and work independently of one another. But if you are looking to create something and you want a new combined name, you will need to go out to your clients and let them know what’s happening. If this is the case, illustrate for Sally how difficult and confusing this change will be if there isn’t a story about why you did it and what the new entity means for the client. The goals and where you want to wind up drive decisions, so work together to determine how you want to represent yourselves in the market and what this means for your clients. Then work on communication together to help bridge the divide in philosophy with Sally.
- You can continue to act independently of one another. Sally’s idea about having a prospect choose, or the two of you choosing based on prospect needs is not necessarily a bad one. I know you would have to let go of your vision that this is a collaborative, cohesive effort but I have seen many practices where advisors are doing their own thing, working with their own niche(s) and operating quite differently in how they deal with the clients. It’s a bit tough on your back-office infrastructure because you aren’t streamlined, but it can work.
- Take Sally out for lunch or dinner and share your distress with her about how this has turned out. Don’t be accusatory but remind her of your discussions prior to the merger. Ask her (stay open-ended and curious) what changed her mind and what she thinks about how this can work going forward. See if you can get her to open up. She may be worried about rocking the boat with her clients, or worried about losing revenue if the change seems too large, or she may not want the hassle and effort that will go into doing this. You want to give her a chance to talk about what she is thinking and why.
None of these options may end up with you in the place you want to be, so be prepared to give up the dream. You probably can’t undo what has been done, so you will need to figure out how to make the best of it.
Dear Bev,
Is it possible to run a firm with someone you don’t like? My partner is not a nice person. He speaks ill of everyone he meets, he couldn’t care less about anyone but himself (divorced six times), his adult children don’t speak to him, the staff is afraid of him and he rarely has a smile on his face. But he is my partner. We make decisions together. He is a smart person. Clients love him. He has the best gut for business I’ve ever seen. I need him. I just don’t like him.
L.H.
Dear L.H.,
The answer is clearly, “yes, it is possible” given you just made the argument as to why you stay in partnership with him. Is it hard to be around someone who is surly and negative? Yes, it is. Are they everywhere in business? Yes, they are! Take the attitude that this is who he is and you aren’t likely to change him. If you start to lose staff, or if the team is so afraid they hide mistakes and it impacts the business, that’s another story. If he is a bad-attitude, curmudgeon type who doesn’t care to change and is great with clients, you might want to acknowledge you don’t like him, but you need him and working with him is to your benefit. Hopefully the rest of the team is engaging and enjoyable and you can focus your energy elsewhere!
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. The firm has won the Wealthbriefing WealthTech award for Best Training Solution for 2022 and 2023. Beverly is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. She is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here. 