Younger advisers get chance to play on the ‘A’ teams

Armond A. Dinverno doesn’t shrink from the responsibilities of leadership — he knows little is of greater importance to the culture of his business.

“Management is the keeper of the culture,” said Mr. Dinverno, co-founder and president of Balasa Dinverno Foltz, an Itasca, Ill.-based wealth management firm.

Mr. Dinverno should know something about the subject. His firm generated among the highest revenue and income of the participants in the InvestmentNews Financial Performance Study of Advisory Firms. Last year, it won a Best Practices Award from the publication.

For Mr. Dinverno, 57, leadership means grooming the next generation. He said retaining top talent is his most important goal and a challenge that keeps him up at night.

These days, that means coming to terms with the fact that employees have enhanced expectations of their careers and move from job to job.

“They want experiences, and so you have to give them the opportunity … for different experiences, different challenges,” he said. “It’s management’s job to create an opportunity for them to do that.”

TEAM APPROACH

His firm has developed two teaming initiatives that give younger employees ways to step up and shape the business.

Like many “ensemble” firms, Balasa Dinverno Foltz organizes client service around teams of junior and senior employees. In that model, senior employees can delegate lower-value tasks. Junior employees can develop skills through experience and the example set by top advisers.

“It’s not really an industry that’s conducive to younger advisers,” said Sophie Schmitt, senior wealth management analyst at the Aite Group consultancy. “It’s hard for a 22-year-old to go out and just build a book from scratch.”

Mr. Dinverno’s ability to invest in younger employees — a luxury that small firms simply can’t afford —can be traced to the 2001 merger with the firm of another adviser, Mark Balasa. The firm also takes its name from another co-founder, Mike Foltz. The combination enabled them to add employees and fine-tune their team-based approach.

“It allowed us to bring our small firms together and catapult the size and the bench of talent to a certain level we could grow from,” Mr. Dinverno said. “We clearly believe we’re going to win more [clients] playing as a team than as an individual.”

Today, the firm’s teams drill down on specialties, including female clients and families that own businesses. That specialization allows younger employees to develop a specific expertise.

“Our service teams are driven by our passion,” Mr. Dinverno said. “We have a ton of experts in those areas, and the team sees those issues over and over again.”

Balasa Dinverno Foltz also has a “SWOT” team — it stands for strengths, weaknesses, opportunities and threats — which puts younger employees in a position to set future strategy and tackle business issues. Mr. Dinverno sits on the committee, but many of the other members are up-and-coming employees.

“It sends a clear signal that we are giving opportunities for management leadership to a next generation of owners of our firm,” Mr. Dinverno said.

In addition to choosing long-term projects to work on, the group has heated debates about the future of the business, according to one person who sits at the table, wealth manager Jim King.

“We’re really comfortable having conflict, and conflict is encouraged,” Mr. King said.

DEVELOPING NEW BUSINESS

Mr. King, 38, started working with a predecessor to the current SWOT team seven years ago. After holding several other positions at the firm, he is now also a part-owner. He said his experiences there enabled him — with a background in accounting, not sales — to learn he could be effective at developing new business.

“I had the opportunity to experiment with it,” he said. “The firm really created an opportunity … to be good at something I didn’t think I would be good at.”

Related Topics: Best Practices, Spotlight On