Joint Work

Joint Work and Partnering

Cooperation is working together agreeably. Collaboration is working together aggressively. John Maxwell – 17 Essential Qualities of a Team Leader

Joint Work can be defined as two or more Financial Services Professional working together with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole. Simple stated, their combined skill sets are brought together to meet the needs of the client.

Joint Work and Peer To Peer Consulting allows investors and financial planning clients to benefit from the strengths of other advisors. Smart advisors will consult with other advisors if they find themselves out of their core competency area or area of expertise.  An example would be an Tax Advisor consulting with an Insurance advisor.

Joint Work and Peer To Peer Consulting is an smart way for producers to grow their business by leveraging the strengths and experiences of other producers. There will come a time when the aspiring Financial Services Professional considers pooling resources and expertise with another Financial Services Professional. This will happen as a result to:

• provide or furnish expertise in a certain skill set on a case by case basis
• move into new markets e.g.You want to market to high-income earners in the Hindu market in your town so you partner with a Hindu producer.
• grow the practice faster thus facilitating business expansion
• acquire efficiencies in areas or skill sets that you do not have

Joint Work Examples

Mentoring Situation: Learning How To Work The Business Markets: The Financial Services Professional wants to expand into the Small Business Owners markets. He feels he does not have the courage, as he has not developed an effective approach to talking to business owners. The Financial Services Professional seeks a mentorship arrangement.
Partnering Opportunity: The Financial Services Professional reaches out to an experienced Financial Services Professional who has made a great living by serving the needs of the Small Business Owners market. They enter into an informal agreement of which the two of them will split commissions and revenues (30% to the Experienced Financial Services Professional on all cases the Experienced Financial Services Professional is called in to consult on.

Financial Planning Situation: A Wealth Advisor has just completed the financial planning process for a client. The advisor does not sell products. The Advisor needs to consult with a product specialist that can provide the products to fund the college funding strategies and the retirement planning strategies. 
Partnering Opportunity: The wealth advisor brings selected product specialists in on a case-by-case basis, depending on the level of expertise needed.

Investment Situation: A Registered Investment Advisor needs to collaborate an estate-planning specialist as she has a high net worth client with a sizable estate. Preliminary review indicates that estate taxes might be a problem.
Partnering Opportunity: The Registered Investment Advisor (RIA) calls in an insurance agent whose specialty is Estate Planning funding strategies.

Life Insurance Situation: A Life Insurance Agent wants to work in the advanced markets. The agent would like to become more familiar with the Restrictive Executive Bonus Arrangement –REBAs.  This independent agent does not want to become more confused with more technical renditions of the concept. But he does want to include this service as he has business clients that have approached him about REBAs.
Partnering Opportunity: The Life Insurance Agent consults with an Advanced Markets Specialist who advises the Life Insurance Agent on Restrictive Executive Bonus Arrangement –REBAs.  The Advanced Markets Specialist sits in on all client meetings and provides the appropriate solutions as well as recommending suitable product funding for the Life Insurance Agent’s clients.

Special Planning Needs Situation: A Financial Services Professional has a client with special planning issues including a developmental disabled child.
Partnering Opportunity: The professional has consulted with his company or agency referral and has been referred to an experienced Financial Services Professional in her office. The experienced producer is a local developmental disabled children specialist having done this type of planning for over 10 years. The Financial Services Professional arranges for the client and spouse to participate in a planning session to address the key planning issues for this special child.

Make The Right Decision

We advise new Financial Services Professionals to wait several years before making this decision to set up a formal partnership. It is preferable to simply participate in a joint working arrangement at first. (Similar to the situations above) This is like dating i.e., taking time to know your future partner’s work habits, advisor style and client orientation. The new Financial Services Professional is advised to consider partnering with someone that they like and respect. Skills and skill sets are important but you are indeed married to your partner’s ability to execute the goals of the partnership. You have to be confident and comfortable the partner can do this.

Keep These Points In Mind When Creating A Formal Partnership

If you form a partnership, the partners own the business assets together and are personally liable for business debts. So be careful. You have to live with this person’s habits and lifestyle! Also each partner is jointly and severally, personally liable for debts and taxes of the partnership. For example, lets suppose your partner entered into agreement with a marketing lead company to buy 10,000 household addresses for $4,000. The partner decided to use the $4,000 for his vacation to Alaska. The creditor could demand liquidation of your partnership assets and if they are insufficient to satisfy a creditor's claims, the partners' personal assets are subject to attachment and liquidation to pay the business debts. Each partner may be held jointly and severally liable for a co-partner's wrongdoing.

Don’t be so eager! The Financial Services Professional agrees to create a partnership and share profits without much thought.. Keep in mind that in the absence of a written partnership agreement, profits are shared equally amongst the partners. Lets say a Financial Services Professional did all the work and service on a particular case and the partners agreed to an 80% / 20% split on fees or commissions. If there is no written partnership agreement, the partners should all take equal shares. The written partnership agreement usually provide for the manner in which profits and losses are to be shared.

Limited Partnerships are different. In a Limited Partnership, one or more ‘general" partners manage the business while "limited" partners contribute capital and share in the profits but take no part in running the business. General partners remain personally liable for partnership debts while limited partners incur no liability with respect to partnership obligations beyond their capital contributions .

Financial Services Professionals should also be sure that the partnership contain the following:

• Objectives of the partnership
• Conditions that you will transfer any assets or employees to the partnership
• What financial contributions you will each make
• Who does what? i.e. management and control
• Confidentiality Agreement
• Non-compete Agreement if a partner should leave
• How any disputes between the partners will be resolved
• Administrative processes to be followed
• Succession Plans i.e. what happens to partnership interest if death, disability, or withdrawal
• Partnership dissolution plan

Joint work and partnering with other Financial Services Professionals make sense. The challenge is knowing with who..and when.