Affiance Financial, a financial planning and investment advisory company in St. Louis Park, assesses clients and employees to align services and strengths.
From left, Seth Meisler, Andrew Fishman and Steve Lear are principals of Affiance Financial of St. Louis Park. The company has used an assessment called the Kolbe A Index that yields a score representing the instinctive way that people solve problems and make decisions. Among other benefits, it helps employees understand one another better and can improve performance, the firm says. Affiance Financial also sees potential in matching advisers with clients.
Closing prices weren't the only numbers that financial planner Steve Lear focused on after markets plummeted.
Lear, the majority owner of Affiance Financial, a St. Louis Park financial planning company, also began taking a closer look at a four-digit score that represents the instinctive way in which he and others at the firm prefer to solve problems and make decisions.
That score comes from the Kolbe A Index, a 36-question assessment developed by the Arizona-based Kolbe Corp. The index measures the "conative" part of the mind, which is focused on doing or taking action. The Kolbe index is less well known than other personality assessments that measure the thinking, or cognitive, and feeling, or affective, parts of the mind. But it has gained traction in the financial services industry, where client relationships are especially critical.
"Everything was hunky-dory; the markets were up," Lear said, recalling the days just before the Great Recession. "Then the markets fell apart and we had to re-analyze how we were going to work together because the stress levels, naturally, from outside were exceptionally high."
Lear, a certified Kolbe consultant who took the assessment 17 years ago, decided to have the entire firm "Kolbe-ized," so that employees could understand how they and their colleagues communicate and deal with structure, risk-taking and tools and tangibles. Benefits, according to the firm, can include improved performance with less effort, greater resistance to stress and enhanced creativity.
Based on their Kolbe numbers, Lear and fellow Affiance Financial owners Andrew Fishman and Seth Meisler realigned some of their responsibilities and those of their staff. They also used the assessment in evaluating job candidates for the five hires they've made this year.
Knowing colleagues' Kolbe scores helps people understand differences in how an individual approaches problems. That can help avoid conflicts that can result, Meisler said. For example, Meisler's preference for detail could pose a natural conflict with Lear's big-picture approach. Fishman, meanwhile, falls somewhere in between those two and often serves as the mediator among the three, who strive for unanimity in making decisions affecting the firm.
"I found it to be exceptionally helpful," Lear said of the Kolbe A Index. "We've used Kolbe to, in essence, make the three of our lives easier, so that we think we can run a more efficient and effective firm and to keep our stress and frustration levels down."
While using Kolbe internally, Affiance Financial has rebounded from 2007. The firm has 17 employees, 600 clients and $470 million under direct management.
In addition to financial planning and investment advisory services, the firm offers investment management, risk management, estate and legacy planning, and business planning services. Revenue comes from fees charged for initial financial planning services, from a fee charged as a percentage of assets managed for continuing planning and other services, and from commissions arising primarily from risk-management products and services.
The results have been positive enough, Lear said, that one of Affiance Financial's top goals for 2013 is to complete Kolbe assessments on current clients who haven't done the assessment and have all new ones do it as well. The idea is to match up the way advisers get things done with the way clients like to get information and make decisions.
Knowing clients' Kolbe numbers is a key element for another goal of Lear's: to transition Affiance Financial from a "silo" model, where advisers each have their own client business, to an ensemble practice where the client is a client of the firm.
"The client will get better service and have more options to consider when they need to make a decision," said Lear, who got his start in 1980 at what is now Ameriprise Financial Services. He launched his own firm in 1989 and formed Affiance Financial through a merger in 2000. Lear, who is also active in philanthropic and community activities, received one of Registered Rep magazine's Outstanding Advisor Awards in 2010.
Last year, Lear formed Affiance Coaching to offer Kolbe consulting services to businesses and individuals. Clients include financial advisory firms that want to use Kolbe in depth and companies outside the industry, Lear said.
David Kolbe, CEO of Kolbe Corp., said Lear is one of 10,000 active clients and one of 400 certified Kolbe consultants nationally.
"One thing that's great about what they've done is offering it to their clients, to build a rapport with them," Kolbe said. "It's an interesting extension of what they do."
The expert says: Caleb Brown, a partner at New Planner Recruiting, a financial planner recruiting firm in Tallahassee, Fla., said the Kolbe A Index has caught on among some financial planning firms.
"You can tell a lot about how to create a plan or deliver it or provide service to the client by having them take a small assessment there," Brown said. "I think that's valuable. Having that insight, you can better position clients to take advantage of and act on that advice."
Brown called the launching of Affiance Coaching a "pretty savvy" move.
"It's probably going to open up some other pipelines for potential clients," he said.