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When Senior Managers Make Bad Decisions

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When Senior Managers Make Bad Decisions

August 19, 2014

by Beverly Flaxington

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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues.  To submit yours, email us here.

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Dear Bev,

So, what do you tell an insurance-based planning organization that owns a mutual fund company, a broker-dealer and an annuity company and has a 150-year track record as a mutual life-insurance company but does not require its recruits to be equities licensed at even the Series 6 level?  These so-called advisors meet with clients but cannot provide the full suite of products and services that the parent company has available.



Dear Bert,

I spent many years working for a large insurance and financial-services firm, and I wish I had the answer on how to easily get through to the managers of large firms. All too often, employees see the negative impact of decisions made but the folks in senior management do not seem to connect their decisions with actual impact marketing the industry.

That said, the answer to your question varies based on your role within the firm. If you have a good relationship with someone in a power position, you can help them understand the impact of their decisions in a few ways:

  • Show them the effect on return on investment. Many senior managers do not have the chance to see the black-and-white impact of their decisions. If the representatives are not registered and therefore cannot sell multiple products, find situations in which this resulted in lost opportunities. Add up the number of times there could have been cross-sell or upsell that didn’t happen due to the advisors’ inability to sell. Present these numbers, as an example, to your management.
  • Ask a couple of large clients write the management, expressing concern that they are not able to understand the suite of products from one contact at the company. Most clients want a single point of contact to help with their needs. A situation like you describe has to be frustrating to many of them.
  • Offer to run an “obstacles” session with some of these new recruits to hear first-hand what they are experiencing in the market. It must be difficult for them to be truly effective without having the necessary licensing to cover all of the product options.
  • Speak with a compliance person inside of the company. It sounds risky to me that client or prospect-facing people are not registered, even minimally. We all know how hard it is to stay out of product discussions with prospects. It would seem important that recruits have some minor level of licensing to protect the company.

However, if you are not able to directly contact someone in a power position, you probably know as well as I do that there isn’t much you can do. At some point, the company will need to realize how much opportunity it is missing or how much risk it is taking and make a different decision. Until then, they are likely shielded from the negative consequences and do not experience the problem you see every day.

I’m a believer in finding ways to approach people and help them to see things differently, but I’m also a realist. I have spent enough time in this industry to know that many decisions in large companies made by senior management don’t make a ton of sense when translated down to the field and to the people dealing with the clients day-to-day.

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