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Hosted by Financial Advisor Coach, Ray Sclafani, "Building The Billion Dollar Business" is the ultimate podcast for financial advisors seeking to elevate their practice. Each episode features deep dives into actionable advice and exclusive interviews with top professionals in the financial services industry. Tune in to unlock your potential and build a successful, enduring financial advisory practice.
Ray Sclafani (00:00.142)
Welcome to Building the Billion Dollar Business, the podcast where we dive deep into the strategies, insights, and stories behind the world's most successful financial advisors and introduce content and actionable ideas to fuel your growth. Together, we'll unlock the methods, tactics, and mindset shifts that set the top 1% apart from the rest. I'm Ray Sclafani, and I'll be your host.
Promoting a high-producing advisor into a manager or leadership role without teaching that person how to lead is not development. That is a risk transfer. Now that sentence may sting just a little bit because that's what so many firms do. Here's an example: a talented advisor grows revenue. Clients trust them. The team respects them. They work hard and know the business. The firm promotes them into a leadership role. Suddenly, they're expected to manage people, give feedback, delegate, coach.
Resolve conflict, run meetings, develop talent, and make decisions that affect culture. But no one taught them how to do any of that. They were trained to be advisors. And in most cases, they weren't trained to be leaders. In fact, most advisors tell me they've learned how to lead on the job in the school of hard knocks. Now, this gap is evident across our entire industry. Sherm's research cites that only forty-four percent of managers globally have received formal management training. So this is not just a wealth management industry issue.
This is a global issue with all companies. And listen to this. More than 90% of HR executives say people managers are critically important to organizational success, and that job satisfaction nearly doubles among workers with highly effective managers. Cornferry's workforce research report also shows that employees are more engaged when managers empower them, provide resources, and offer real support.
Ray Sclafani (01:55.456)
Engagement drops off when managers are overwhelmed or when organizations cut back on management support. So all of this matters because managers shape the firm's lived experience, not the values poster that sits in the conference room or the break room, not the retreat agenda, not the title structure, managers. They decide how feedback is delivered, whether accountability is real, whether talent is developed or ignored.
Whether high performers are challenged, whether underperformance is tolerated, whether meetings are useful, and whether people feel stretched and supported and included. In an advisory firm, leadership development is not soft skills, it's an operational and economic one. It affects growth and retention, client experience, and ultimately enterprise value. Here are five direct questions for you and your leadership team.
Do we conduct performance reviews more than once a year? Do managers hold one on one meetings at least monthly? Do employees receive regular feedback? Have we defined what meeting, exceeding, and far exceeding expectations looks like for every role in our firm? And are managers held accountable for engagement, retention, and development? That is the right frame. Here's how you do it Step one Define the leadership role.
Most leadership problems stem from vague expectations. When a person is promoted to manager, but that role's not clearly defined, well, are they accountable for performance, development, culture, retention, delegation, career pathing, recruiting, growth, client experience? You might be listening to me going, Well, yeah, all of that. But if the answer is yes, then say it so, put it in writing and measure it. A leader should know exactly what they own.
They should know which decisions are theirs, which require alignment, which belong elsewhere. Okay, step two, define what strong performance looks like. This is where you might consider sharpening a real discipline. Don't just say someone's doing well, define what that means. For each leadership role, describe what meeting expectations looks like, then describe exceeding expectations, then describe far exceeding expectations.
Ray Sclafani (04:12.182)
Meeting expectations might mean the leader holds regular one-on-ones, provides timely feedback, follows through on commitments, and keeps the team aligned. Okay, good. What's exceeding expectations? Well, that might mean the leader develops talent ahead of need, strengthens team capacity, reduces confusion, and helps others make better decisions. And far exceeding expectations might mean the leader develops leaders who can develop other leaders. They build scalable systems, they improve retention.
They make the firm less dependent on any one person. Well, once you define the levels, performance conversations and calibration and comp decisions, development plans, all improves. People stop guessing. Step three is build a feedback cadence. Annual reviews are too slow. By the time the review occurs, everyone already knows what should have been said months earlier. Managers should hold regular one-on-ones. They should provide feedback in real time.
They should ask what is working, what is unclear, what needs to change, what support is required. And they should also ask what employees are learning and where they want to grow and go in the company. Feedback should not be dramatic. It should be normal. Step four, hold leaders accountable for the people they lead. This is the part many firms avoid. A manager should be evaluated not only on their personal performance or technical competence, but also on the engagement, retention, development, and performance of their team.
If a leader is personally successful but leaves behind a bunch of confusion or burnout or turnover, well, that's not strong leadership. When a leader develops people who can take on more responsibility and those people can develop others, well, that now has enterprise value. There's a difference between being impressive and being useful to the firm's future. Leadership is about the latter. Here's the practical step: create a leadership scorecard for every manager in your firm. Include five measures.
Communication rhythm, feedback quality, talent development, accountability, and team health. Review it quarterly, coach to it, compensate it. That's not about making managers perfect. It's about making leadership observable, coachable, and measurable. The best firms will stop assuming that leadership comes from experience. Experience matters, but so do competencies, so do skill set. And there's training required to
Ray Sclafani (06:40.344)
To improve all of that. A person can spend 20 years in the business and still avoid having the hard conversations, still delegate poorly, run weak meetings and fail to develop others. So experience isn't the answer solely. The firms that develop leaders will win because they will not rely on any single founder, a single rainmaker, or a single heroic operator. They will build their bench of leadership depth. And that leadership depth is what allows a firm to grow.
without breaking. Okay, with each episode, we provide a few questions for reflection. Today there are four. Number one, which leaders in your firm, including you, have been promoted based on production or contribution, but never trained to lead? Number two, where have you clearly defined performance and where are people still guessing? Number three, which leadership behaviors should be measured because they shape culture and retention? And number four,
What would change if managers were held accountable for the growth of the people they lead? Hey, thanks for listening. Please like and share this episode with someone you know needs to hear it. Well, thanks for tuning in, and that's a wrap. Until next time, this is Ray Sclafani. Keep building, growing, and striving for greatness. Together, we'll redefine what's possible in the world of wealth management. Be sure to check back for our latest episode and article.