Business-Development People Don’t Work for RIAs

Dear P.W.,

There have been many times in the years I have been writing this column when I have a conversation with a client and later that day or week I receive a similar inquiry on the topic. It reminds me how important it is to share knowledge, because many advisors are asking the same questions and dealing with the same considerations. Earlier today, I was talking with a client about the best way to infuse a sales mentality into their firm, and who is best to drive new opportunities, qualify them and (in their case) pass them off to the right advisor within the firm. They have a unique team model, so it is a bit different (and honestly easier) than a sales perspective. But this question comes up quite often.

I am not a fan of hiring a pure business-development person for an RIA for many reasons. I’ll outline a few here:

1. Most RIAs do not implement or embrace a “sales culture.” Sales is often viewed negatively, and advisors don’t like to see themselves in the position of selling. When you bring in someone whose job is to sell, there is an inherent conflict. That person likely gets paid for new sales, wants to push opportunities to be successful, and can conflict with the rest of the team. Advisors don’t want to be pushed and don’t want their clients pushed, and they often don’t like to be told they have to engage in sales activities when there might be other client-related activities they need to do. I have consistently witnessed conflict in RIAs when someone dedicated to sales is hired.

2. Your best avenue for new opportunities is often going to be your advisors. Consider whether they are trained to uncover new opportunities within your niche areas. Do they feel comfortable asking for introductions from clients? Have they developed strong COI relationships in these niche areas? Are there junior advisors you could partner them with to explore new opportunities? Make sure you have given your existing team all the tools necessary.

Don’t hire a business development person. Make sure your advisors are trained and empowered to increase new opportunities.

Consider whether there are other leverage points within your two niche areas. Are there industry conferences or groups where you could become friendly with the senior leaders and deepen COI connections? Are there opportunities for one or more of your advisors to become more immersed in the market where these niches are found? How can you get creative and deepen relationships where you are already known and respected without hiring someone to pursue these areas?

I am not a fan of a pure business-development role for RIAs. It is too often fraught with issues and rarely works. Everyone gets frustrated. You end up spending money and losing time. Consider the other options first, and see whether you can make 2023 your banner year without hiring someone devoted to sales!

Dear Bev,

How do I motivate completely unmotivated team members?

K.L.

Dear K.L.,

I hesitated to answer this question because it is so wide open and could take pages. But I am responding because it comes up in so many different ways in most of the engagements I have.

You might not like my response, however, so be prepared. Here goes…

1. Calling someone “unmotivated” is a judgement unless the person has expressed to you, “I am feeling unmotivated,” and you have factual basis for this. In my graduate classes and with breakouts in my training, I often try and illustrate the tendency to ascribe emotions and assumptions to someone else’s behavior when one doesn’t have the facts and the data to do so. You are approaching these people with a built-in assumption they are unmotivated. You won’t be open-minded toward them, so you won’t be considering other options, such as whether they know exactly what to do, are trained, are fearful or are having a bad day! To influence or motivate someone, refrain from putting them in a box where you “know” what they are thinking or feeling and why.

2. Adopt an attitude of curiosity. If you have given the person (or people) clear direction, the tools and training they need, support and coaching and an environment where they can share their obstacles, then the key question is, “What is getting in the way of your success?” Pose this as an open-ended question with no expectation for what you are going to hear. This is the hardest thing for leaders to do because they don’t believe the person has a right to feel the way they do. Stay open because it is in your best interest to understand why the person is stuck.

3. Recognize that people are self-motivated, and it’s hard to motivate someone unless you have created an environment where they become self-motivated. Lay out a vision they are excited about, show them where they fit in the vision, assign tasks and outcomes that connect to the vision, and give them all the tools they need to do their jobs effectively. It’s not your job to motivate; it’s your job to create the environment that allows people to thrive and become involved and excited about what they are doing.

4. Examine why you are infusing “motivation.” Do you need tasks completed that are not getting done? Are you frustrated because you believe others should care as much as you do? Is the firm having trouble somewhere and you believe it is incumbent on your team members to figure out a fix? Self-reflect and consider what’s driving your need to motivate someone else.

5. Create an open environment where your team members are encouraged to offer suggestions for changes and to raise attention to obstacles to achieving their goals. There could be things in the infrastructure you need to know about. If you don’t allow team members to bring these things forward, they will be unmotivated. What’s the point when you can’t succeed and see reasons why, but no one wants to hear it?

I know this isn’t what you were looking for – you wanted the steps to take to turn these unmotivated sloths into your biggest contributors. When people aren’t performing as they should or could, and they appear unmotivated or disengaged, it has something to do with the leadership or the environment they are operating in.

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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