The Bell Curve

Human behavior is extremely consistent, and it’s particularly true when you measure it across a large group of professionals. The Bell Curve, defined simply as 25% above average, 50% average and 25% below average can be found in almost any profession - teaching, medicine, law and financial services. Parents with school-age children always want the best teachers. The victim of injustice always wants the best lawyer. The patient diagnosed with a medical condition requiring surgery always wants the best surgeon. Finally, the retired couple with their life’s savings always wants the best financial advisor.

As many of you know, wealth management has been my life’s work. The industry has four channels. By my count, major wirehouses have 50,000 advisors. Regionals have 30,000. Boutiques have 20,000. Finally, there are 30,000 independent advisors (100 Mil+ Assets Under Management). That’s a total of 130,000 advisors. Let’s now apply the Bell Curve. 32,500 are above average. 65,000 are average, and 32,500 are below average.

Okay, how do we measure the quality of a financial advisor? It’s a fair question. I’d answer it from a client’s point-of-view. Did the advisor enable the client to reach their goals (pay-off mortgage, college, retirement, etc.)? Did the advisor protect the client’s assets (life insurance, disability, LTC, etc.)? Did the advisor work with the client’s other professionals (CPA and Estate Planning Attorney, etc.)? Did the advisor provide a level of service consistent with the client’s expectations?

I am not a social scientist, but it’s my guess if you asked 100 financial advisors where they ranked on the bell curve, 75% would say, “I’m in the Top 25%.” That suggests some advisors have an inaccurate perception of their value. Most of us, myself included, don’t spend enough time on honest introspection. The hectic pace of life (jobs, kids, chores, etc.) is always the biggest culprit. However, maybe the real reason is fear of looking at our professional shortcomings.

Being a top performer is hard. Being a top performer year-in and year-out is even harder. How about being a top performer over our entire career which now spans 40 years (ages 25 to 65)? That’s unfathomable!

Over the course of my career, I’ve always strived to be in the Top 25%. In fact, I’ve worked tirelessly to be in that esteemed group. Truthfully, I haven’t always succeeded. Over my 38 year career, I have been average at times. Yes, even below average. Looking back, those were tough times. Tough on my pride. Sometimes tough on my paycheck. Pride and paycheck mattered, but what mattered more were those I served. As a branch manager, I served advisors. That was always my incentive to improve. It was never metrics. It was always people.

As a flawed professional, I have empathy for those who have periods of average or even below average performance. The professionals I admire most, however, are the ones who are humble enough to admit when they’re struggling, and ask for help so they can improve. Not for personal vanity, but for better client outcomes!

Paul Sullivan

Founder and Managing Partner

Wealth Management Independence

(973) 525-7627

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I want to help my Big 4 colleagues learn more about the benefits of Independence.

I welcome a confidential conversation and can be reached on my cellphone at the number listed above.

Another resource to learn more about Independence is my website: www.wminyc.com