The Magic of Production Teams

by David J. Drucker  | 04-19-07

I hear about the escapades of Joni Youngwirth, Commonwealth's vice president of practice management, frequently in the press releases the independent broker/dealer's in-house publicity manager distributes. As someone whose job is to bring innovative practice management programs and consulting to Commonwealth's independent advisors, Youngwirth seems to do something newsworthy at least a few times a year.

One of her recent ventures is the creation of what she calls "production teams," groups of hand-picked advisors who will work together during the year to learn how to concentrate their focus on productivity-enhancing behaviors. "We actually started out last year with four production teams, but one didn't make it because of chemistry. Putting together these groups is an art form. Every year, we become more particular about who can be in them. We now base our decision not on who can increase their production, but on who will really do the work."

A production team is a team of 10 producers who work together by conference call to learn how to increase production. "This isn't a generic practice management group--we don't talk about products--we just discuss those activities that lead to increased production," Youngwirth says.

Why the emphasis on advisors with gross dealer concessions (GDC) in the range of $200,000 to $400,000? "The high producers don't seem to benefit the same way producers in [our target range] benefit. Producers between $200K and $400K are the ones getting the best results."

Paul Bonapart, owner of Bonapart Financial Security Planning Services in Corte Madera, California, after participating in a 2006 production team, saw his GDC increase by more than 44 percent, according to Commonwealth's press release. A 15-year veteran of Commonwealth, Bonapart says, "The study group facilitated interactions with my peers, which is valuable as an independent financial advisor. Beyond focusing on profitability, I learned to internalize practice management as a key business planning principle."

But what do the production teams specifically do to cause such an increase? They identify production-increasing activities that reps learn to spend time doing each day in order to earn points. By accumulating points, they spend more of their time on the activities that will boost revenues. Says Youngwirth, "Production team participants must use the point system, and they must tell other participants how many points they've accumulated on every conference call."

Points are earned for allocating time to the most productive activities. "We could all be busy every day," says Youngwirth, "but activity doesn't necessarily increase revenue." By assigning points to the activities that count, however, advisors can redirect their efforts. "For example, a rep will earn one point for asking a client for a referral, or he'll earn five points for meeting with a prospect."  Other production-enhancing activities that will earn the rep points are things like business planning, marketing, or taking steps to transition to fees.

"Our focus on making the rep accountable has increased since we began the program," says Youngwirth. "Business planning is a good example. We have a new program this year that will focus on doing some of the things reps know they should do but don't always get done--infrastructure activities like business plans, marketing plans, categorizing clients [as to their profitability]--things reps will say they know they should be doing but don't always do."

Josh Gottfried of Levine, Gottfried & Somberg in Glastonbury, Connecticut, says he benefited greatly from finally putting together a written business and marketing plan. "I'm now truly goal-oriented. I set goals for myself every week and every month. For example, one of my colleagues 'touches' at least 10 clients every day, and I've started to do that now." Gottfried's efforts netted him a 24 percent increase in revenues in 2006 over 2005.


Gottfried's story explains why some reps jump at the chance to be a member of one of Youngwirth's production teams. "Most people in this industry start with a big wirehouse and have lots of interaction with other planners," says Gottfried. "I didn't have this, so I used [the production team] as an opportunity to network with other advisors who weren't my competitors so I could see what their 'best practices' were." Yet he discovered that every advisor has different strengths and weaknesses. "We had specific production goals, but they were different for each participant. In effect, we were competing with ourselves, but we had to be accountable to the other team members in every phone call."

By setting and reaching a goal of 15 points per day, Bob Walczak, with Granite State Wealth Management in Salem, New Hampshire, realized an annual production increase of 38 percent. Walczak already had what he describes as a "dashboard," or system of tracking his goals, weekly appointments, referrals, and revenues. He then augmented that system with Youngwirth's point system. "I would give myself points for things done during the day, like returning calls, going to the gym or getting to work early. This system makes you focus."

Walczak says that the two most beneficial changes he made to his practice were raising his minimums and hiring an associate, which allowed him to prune his book. "By categorizing my clients as A, B, or C clients and moving the Cs to my associate, I can now spend my time working with the As and Bs and on getting new clients," Walczak says.

Bonapart says that by spending time on the production team with his colleagues he learned that his love of spreadsheets and forms isn't necessarily a bad thing. "I now know it's not just nerdy to enjoy practice management. I'm a big fan of procedure manuals and checklists, and I even look forward to doing practice management activities for my business on the weekends."

What does Youngwirth see her teams getting out of their involvement in her program? "First, the point system is really powerful for them; if at the end of two weeks they don't have right number of points, they work to get their points. Second are the 'one liners,' or questions reps learn to ask clients. For example, 'Do you know what your parents are doing to preserve their wealth?'  Adult children seldom know the answer to this question, which leads the rep to ask, 'Would you like your parents to have a professional they can talk to about their financial issues?'" 

All the production team members who share these one-liners, statements, and questions benefit from this exercise, says Youngwirth.

Throughout 2006, 22 Commonwealth advisors participated in the bimonthly conference calls to increase their revenues. Commonwealth has determined that advisors earning between $200,000 and $299,999 GDC in 2005 averaged a growth rate of 37.9 percent; a peer group in the same production range who did not participate in the production teams averaged an 18.2 percent growth rate. Participating advisors with between $300,000 and $399,999 GDC achieved a 21.3 percent average increase versus 13 percent for their nonparticipating control group.

This whole exercise is, to me, a lot like the process students go through at some point in their school careers. They need to learn what they need to learn, and they also need to learn how to learn it. Production teams teach the process of working on one's business to set and achieve goals. These are basic but critical lessons. After all, the smartest students will still fail to achieve the grades they want if they haven't learned the necessary study skills.