So What’s All the Fuss About Teaming?

Across the financial services industry, there has long been an interest in forming teams of financial professionals, not only for improved productivity and market focus but also for continuity of a practice. About two years ago, Penn Mutual decided to pilot an initiative surrounding team selling, starting with just five firms and doubling that in the second year. We measured our progress, of course, and the results make a compelling argument for why financial professionals today should consider a collaborative approach to prospecting, client servicing, marketing and overall growth and development of a healthy, sustainable practice.

We were looking to achieve two measurable results when we started the pilot back in 2015. The first and most important factor was: What kind of impact would teaming have on sales? The second was: Would it improve retention of financial professionals? As a company and industry, if we want to grow, we need to improve our ability to retain those new financial professionals we hire. We saw positive results in productivity and retention, enough to move teaming from a piloted initiative to a contributing strategy.

The impact of high-performance teaming on production

In the early years of teaming at Penn Mutual, with most of our teams in the formation stages, we attributed our positive results to working in a focused environment where senior financial professionals are encouraged to look at their practices with a very considered eye – determining who their ideal client is and what expert solutions they can provide. The formation stage of being a team focuses on laying the groundwork for how to function in a group, as well as what actually needs to be done, now that the team can “divide and conquer.”

One thing we knew going into the initiative was that results wouldn’t come immediately. Teaming is a long-term strategy, and the first year is truly a period of investment and laying the groundwork. You have to understand your existing practice, the unique abilities of all your team members, a clear idea of your client process, commission splits, how you are going to market as a team, what you’ll do to attract new clients … the list is long and pretty thorough. While we’re very encouraged by our early results, we also recognize that there’s still a lot of work to be done – and a lot of potential to be realized – with our teams. We’ve only scratched the surface of how high-performing our teams can become as they go through years two and three.

Teaming improves retention

Teaming also had a strong impact on retention. We compared the retention rate of new financial professionals on a team against a similar group of new financial professionals who weren’t on a team. For the first year, the retention rate was similar between the two groups. Whether or not you’re on a team, you’re still learning during your first year. We started to see some significant differences in retention by the end of the second year, and it was the third year that really showed the difference.

Clearly, it retention improves when you have attentive mentorship, guidance from a senior financial professional, and the opportunity to learn while on the job. Working collaboratively fosters accountability, which in turn creates success.

Why is there such a dramatic difference in retention between being on a team and not being on a team? First, there is the benefit of being part of a group, where everybody’s trying to help everybody else. No one is left struggling by themselves. You also have the mentorship from an experienced financial professional and others on the team to help you through the tough days: “Our team vision is this … we can get there together. Your role on the team is this … let’s stay on strategy and focus, and we’ll see results.” There is much to be said for feeling part of a team, and working together for a common cause.

Division of labor is key

Having a clear-cut understanding of your role on the team and how it impacts your teammates is critical. Everyone on a team needs to have different role and there needs to be an effective division of responsibilities. Successful teams establish clear roles, capitalizing on people’s individual strengths rather than having them be all things to all people.

For example, if you have a team full of people who are good “openers,” no business will close. Similarly, if you have a team of financial professionals who are all good at “closing,” who is prospecting and opening cases? Teams need diversity in terms of skill sets. In the world of the solo practitioner, where you are doing everything yourself, where you are all things to all people, it’s easy to get bogged down. Not so in a collaborative practice; a much more effective use of time and talents

Moving beyond the pilot stage

Teaming is most definitely here to stay at Penn Mutual. Our results so far have been solid and sustainable and we’re looking forward to continued success. Right now, our teams are all at varying stages of development but all striving for high-performance, not only in productivity but also in the way they operate. Teams are only as good as the people that form them, so the personality mix has to be right. It’s not enough to simply band together as a team and expect the magic to happen. The Chicago Cubs are a team, but it took them more than 100 years to put together a team that was capable of winning a World Series. Expect a lot of stops and starts in the beginning as you start forming your high-performance team; however, once the mix of personalities and systems are in place, you will start to see results.

Do you want to know how to build a high-performance team? Keep checking the blog! In a future post, I’ll address some of the characteristics of high-performance teams.

This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your client’s situation. The information in this material is not intended as tax or legal advice. Always consult your legal or tax professionals for specific information regarding your individual situation.
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