Why great financial advisers make lousy leaders (unless they fix these things first)

Many founders are brilliant financial advisers or planners, but that doesn’t automatically make them effective leaders.

Success as a financial planner is often built on personal performance, such as technical expertise and client focus.

Being an awesome leader requires a completely different skill set, including the ability to foster collaboration and develop first-class teams.

So, if you want to harness the talent in your team to develop strong leaders – or become a brilliant leader yourself – here are a few key things to keep in mind.

Financial advisers and planners are trained to solve problems

Think about the best financial advisers in your team. What makes them so successful?

It could be any number of things, but we’re willing to bet that they excel at solving clients’ financial problems directly. They use their extensive knowledge and experience to deliver consistently excellent results.

Of course, you need plenty of advisers like this on board to keep your clients happy.

But leaders have to know how to develop people who can solve problems, rather than solving the problems themselves.

They need to inspire and empower others by setting a clear vision, enhancing collaboration and boosting motivation. Skills such as empathy, influence and communication are essential for effective leadership.

In simple terms, financial advisers and planners often focus on the “how” of meeting clients’ needs, while leaders are more concerned with the “why” and “what” of the business. For example, “Why does our work matter?” and “What specific goals can guide the team’s efforts?”

A “lone wolf” mentality could hamper progress

Many financial advisers are used to working independently, focusing on their personal development and results. This strategy could make for a highly successful career, but it probably won’t cut the mustard when it comes to leading a firm that can scale and grow.

If everything in the business routes through you, progress is likely to be limited.

In our experience, founder-led = founder bottleneck.

The most effective leaders shift their focus from themselves to the team and the business as a whole. They recognise and nurture talent, creating an environment where everyone can achieve their potential.

Most leadership teams are inherited, not designed

Bumping an adviser up the ranks of seniority just because they’ve been with you since day dot may not be the best approach to leadership planning.

Yet, we see a surprising number of businesses doing just that. That’s why many financial advisers make lousy leaders – they’re not prepared for the role.

Unfortunately, friendship, tenure and loyalty aren’t a substitute for capability. As we’ve already explained, leadership requires a very different skill set from being a financial adviser.

So, putting your mate Bob on the senior leadership team just because he’s a good egg might be setting him up to fail.

Instead, you need to design a team by assessing individual skills and experience – and providing leadership training where necessary.

Read more about our Impactful Leadership programme.

Teams crave direction and feedback

Financial advisers who are used to focusing on their progress and objectives alone may not be confident in critiquing and setting goals for others.

Yet, without direction, culture drifts — and good people underperform or leave.

Leaders need to provide constructive feedback that helps individuals develop key skills and improve their performance. This, in turn, could:

• Boost employee engagement
• Foster stronger working relationships
• Enhance communication within the team.

While setting a clear direction could:

• Help teams adapt to changing needs
• Provide a shared sense of purpose and motivation
• Reduce unnecessary work and increase productivity
• Ensure everyone understands their roles and how they contribute to the team’s goals.

Leadership is a skill, not a personality type

The good news is that you and your team can evolve from being financial advisers into brilliant leaders.

Leadership is not something that a lucky few are born with and if you weren’t, tough luck. It’s a skill that can be learned and continuously developed like any other.

But not if you’re buried in client work.

If you want to avoid being branded as a lousy leader, you need time to develop any skills and knowledge you might be missing. And, of course, you’ll need space in your schedule to actually lead.

The key message here is that leaders are made, not born.

You need to approach leadership with intention, rather than assuming that an exceptional financial adviser will naturally be an exceptional leader.

Get in touch

If you and your team want to become brilliant leaders, we can help.

Find out more about our Impactful Leadership programme or get in touch.

Drop us an email at hello@melo.co.uk or call us on 0113 4656 111.