The Growth Mindset

Leadership Makes a Difference in Wealth Management

Rick Capozzi

• Publisher: Wiley
• Year: 2017
• ISBN:
  9781119421986
• Edition: 1
• Topic: Business
• Subtopic: Investments & Securities
• Index: Business

It takes a bold approach to leadership to thrive in the era of disruption

The Growth Mindset provides a roadmap to the future for financial professionals. While the FinTech revolution is changing the wealth management industry, there is one thing that technology cannot offer—the human component of advisory services. Your client can pull numbers out of a computer, but they come to you for analysis, perspective, and interpretation based on your understanding of their goals and your years of expertise. Great leadership forms strong relationships and allows you to quickly adapt the best strategies to grow assets and revenues. It understands this dynamic, understands the alignment of company culture, and realizes that the metrics for "top talent" are shifting. This book offers new perspective and expert insight for wealth management professionals looking to distinguish themselves from the competition. The focus is on being client centric and solution driven.

Disruption is now the new normal, and successful leaders must be able to adapt quickly and operate with an eye toward growth. Here, you'll find expert analysis of wealth management's future, and clear guidelines for leaders who want to thrive amidst the constantly-shifting financial services landscape.

• Master the fundamental elements of wealth management
• Shift to a growth mindset and deal successfully with change
• Attract, develop, and retain the top talent to grow your business
• Offer a unique value proposition to better serve high net worth clients

The wealth management industry is facing its greatest challenge to date, and whether your business fails, survives, or thrives depends on leadership. You simply cannot rely on old methods to win a brand new battle. It's time for a change in strategy, methods, processes, and approaches—are you flexible enough to bend without breaking? The Growth Mindset lights the way forward, with the leadership skills that are quickly becoming essential in the new era of wealth management.

PART ONE
Leadership Makes a Difference in Wealth Management

Leadership is the buzzword of the twenty‐first century. Who is a leader? What qualities do the best leaders have? Are leaders born or made? It's a bull market for leadership books, and that should not surprise us. Because of the increasing rate of change in the marketplace we are looking for ways to adapt, improve, and increase performance. With over 20,000 books on leadership available, it's difficult to come across a new idea that the great thinkers and philosophers have not written about in the past 2,400 years. Therefore, I'm not trying to reinvent the wheel; I'm simply trying to share the proven leadership strategies that achieve business results. These strategies are based on research and my own experience over the past 34 years. These ideas are not based on consulting assignments; they are based on my street‐tested strategies and tactics working side by side with advisors, managers, and clients.

Within the wealth management industry, these questions about leadership are critically important as the industry overall is undergoing a revolution. In situations where advisors traditionally make recommendations and act (or not) based on their clients' responses, today's successful wealth management requires strong leadership to build client relationships and construct full wealth management plans to achieve the life goals of clients. Today, an advisor must be a leader. It is nonnegotiable.

Let's look at it from the history of humankind and how we survived and evolved over the years. For millions of years, humans lived as hunter‐gatherers. Then humans shifted to farming for thousands of years, then to the age of industry for hundreds of years, and then to the Information Age for several decades. And the next age upon us is the age of augmentation. Each shift has happened faster than the one before it. Our ability to evolve with each new phase requires strong leaders to learn and adapt faster than they have had to in the past.

Part One of this book focuses on identifying and defining the leadership qualities you need to set yourself apart from the 300,000 advisors in the United States. From communication to collaboration, from creating a vision to establishing a culture, from recruiting to coaching, and from courage to empowerment and gratitude, these are just some of the leadership topics covered in these chapters. The chapters I cover in Part One are based on my observations for the past three decades of what the most effective leaders have done to achieve success and what they are doing today to grow a wealth management business. The overall theme revolves around delivering a truly holistic, consultative and customized solution for the high‐net‐worth client. I emphasize the importance of creating deeper relationships versus focusing on transactions. Leveraging new technologies in your business creates more scale and efficiency, leaving you more time to build and deepen relationships. You may need to reevaluate your relationships with people in your life and on your team. Critical to this process is making sure that you are taking care of yourself. The focus is on the soft skills and that internal dialogue. It's about our belief system and the demons that we are trying to shake off and rise above.

Just as we approach the client relationship holistically we will approach the advisor's relationship the same way. Over the years I have seen tactical business plans that simply don't have staying power because the plan lacks vision, purpose, and strategy. Many advisors simply keep doing the same things and expecting different results. These qualities are becoming more critical than ever because the advice business is changing right in front of us. The historic purview was narrowly focused around investment solutions. The future of advice needs to be much broader in scope and depth. It needs to include discussion of liabilities, tax and estate planning, insurance needs, healthcare planning, assistance with budgeting and spending controls, cash flow analysis, and legacy planning. The past was about seeking alpha returns and that was the differentiator for choosing one wealth manager over another. The future will be about helping clients achieve their goals—all of their goals. Therefore, the right leadership will set the right vision and strategy to evolve to these changing needs and take market share.

Chapter 1
Communicate Effectively to Move People to Action

“The most important thing in communication is hearing what isn't said.”

—Peter Drucker

Growth is impossible without communication and leaders with a growth mindset are great communicators. This means that they are great listeners as well as compelling storytellers. Your ability to master the art of communication is your greatest tool. How do we influence and persuade others? We use our position, authority, experience, skill, and knowledge. All very important to be effective, however this is only half of the equation; this is where many miss the opportunity to be great communicators. They forget, or don't understand, that just as important is not only what we say, but how, when, and where we say it. Your gestures, timing, tone, rhythm, and overall body language. Once you truly understand that you are always communicating, not just when you open your mouth, you have a better opportunity to be effective. Focus more energy on how you say it. Our ability to sell ourselves and our ideas is paramount to be successful in wealth management.

Listen to Understand

Leadership is not a monologue—it's a dialogue. It's about asking compelling questions and then listening—really listening—to the answers. Great leaders are intuitive listeners who can quickly size up the emotional needs of others and respond appropriately. They can establish rapport very quickly. They have big antennas in order to identify common interests and are able to make emotional connections. If you have been in the business for some time, I'm sure you are saying to yourself, but of course communication is important, this is basic. Yes, it's basic and yes, everyone knows this. So why do I bring it up in the first chapter? While the majority of managers and advisors agree that communication is critical to the business, I'm amazed by how many are unable to communicate effectively. Our words say one thing and our body language says something different. People don't think before they speak and then it comes out the wrong way. People are misunderstood all the time because the advisor or manager didn't take the time to listen or never learned how to listen actively and intuitively. Today, technology makes it so easy to send a text message or email, but we are in the people business. I can learn more from looking into someone's eyes after I ask them a question than I can from an exchange of 20 emails. That's why I call communication an art, and that's why I'm suggesting, based on thousands of client meetings and seeing people's personal interactions, that we can improve. It's simply the most effective tool. To understand and be understood is a wonderful thing when it happens. It's about mastering the fundamentals.

First, most of the time we make assumptions of what people really mean when we hear them. Everything people say is open for interpretation. For example, if I say to you, “Bob, that's an interesting tie you have on,” 99 percent of the time when I make this statement in my workshops, I get the same response, “Thank you.” I didn't say I liked the tie; I didn't say I didn't like the tie; therefore what did I say? Nothing. A better response might be, “What do you mean by ‘it's an interesting tie'?” If a prospect says, “I'm risk averse,” we can't reply by simply saying “Okay.” The better response is, “Please tell me more about that,” or “What do you mean?” The point is, it's imperative we stop making assumptions or misinterpreting what clients are saying. This can only happen if we slow down a lot. Stop talking and instead peel the onion back by asking follow‐up questions.

Ask yourself:

• Do I listen when others talk or just focus on my response?
• Am I focused on the speaker or am I thinking about what I need to do next?
• How well am I picking up and listening to what is not being said?
• How well am I reading their body language?

“When people talk, listen completely.”

—Ernest Hemingway

Talk to Be Understood

Great leaders communicate clearly, expressing themselves in a way that's authentic and doesn't keep people guessing. A leader talks to help people understand the big picture, get inspired, and execute on a shared vision.

The win‐win model I follow for an effective meeting includes having a clear vision of the ultimate objective, doing you...

Table of contents

• Cover
• Title Page
• Table of Contents
• Advice from a Tree
• Introduction
• Acknowledgments
• PART ONE: Leadership Makes a Difference in Wealth Management
• SUMMARY: Part One: Leaders with a Growth Mindset Grow
• PART TWO: Growing Your Wealth Management Business
• SUMMARY: Part Two: Growing the Business Requires That We Evolve, Lead, and Serve
• PART THREE: What Clients Really Want
• Conclusion
• Suggested Readings
• About the Author
• Index
• End User License Agreement