SUMMARY
As advisory firms grow, many leaders encounter an unexpected challenge. The same abilities that helped them become successful advisors often begin to limit the growth of their teams. Financial advisors are trained to diagnose problems, identify solutions, and make decisions quickly. These skills are valuable when serving clients, but they can unintentionally create dependency inside an organization. Team members begin bringing every issue to the advisor, who provides the answer and sends them back to work. While this may seem efficient in the moment, it creates a pattern where the advisor becomes the central hub for every decision. Over time, this dynamic limits team growth, slows decision-making, and creates a significant bottleneck within the practice.
This episode introduces a practical framework designed to break that cycle: the 1-3-1 Exercise. The concept is straightforward but powerful. Instead of bringing a problem and waiting for an answer, team members are encouraged to bring one clearly defined problem, three possible solutions, and one recommended course of action. The objective is not simply to solve the immediate issue. The goal is to intentionally develop better thinking, stronger judgment, and greater ownership throughout the organization.
The process begins with defining the actual problem. This step is more important than many leaders realize. People often communicate symptoms, frustrations, or broad concerns rather than identifying the true underlying issue. A vague statement such as “our review meeting process isn’t working” provides little clarity and makes problem-solving difficult. Effective leadership requires helping team members narrow their focus and identify what specifically needs to be addressed. The simple question, “What is the one problem we are trying to solve?” often improves the quality of the conversation before any solutions are even discussed.
Once the problem has been clearly defined, the next step is identifying three possible solutions. The requirement for three options is intentional. Most people naturally gravitate toward the first solution that comes to mind. By forcing individuals to generate multiple possibilities, they are encouraged to think more critically, consider alternative approaches, and evaluate potential trade-offs. This process shifts them from reacting to a problem toward actively engaging in problem-solving.
Importantly, the purpose is not to find the perfect answer immediately. Rather, it is to develop the habit of exploring options. In a leadership context, the ability to evaluate different courses of action is often more valuable than simply arriving at a correct answer. Team members learn to view challenges from multiple perspectives and become more comfortable navigating uncertainty.
The final step, and arguably the most valuable, is making a recommendation. After defining the problem and evaluating several possible solutions, individuals must identify which option they believe is best and explain why. This requirement creates accountability and encourages thoughtful analysis. Instead of outsourcing decision-making to the advisor, the team member participates in the judgment process. They must consider consequences, weigh benefits and drawbacks, and articulate their reasoning.
This recommendation stage fundamentally changes the dynamic between leader and team member. Rather than functioning as the sole decision-maker, the advisor becomes a coach. The conversation shifts away from “what should we do?” and toward “what led you to this conclusion?” That subtle change creates a valuable learning opportunity, allowing leaders to guide thought processes rather than simply providing answers.
Over time, the benefits compound. Team members become more confident in their ability to analyze situations, evaluate alternatives, and make recommendations. Advisors gain valuable insight into how their people think, which helps identify strengths, developmental opportunities, and future leadership potential. The process also creates a pathway toward expanding decision-making authority within the firm.
The episode reinforces an important leadership principle: developing problem-solvers is more valuable than solving every problem yourself. Many advisors unknowingly reinforce dependency because providing answers is faster in the short term. However, every time a leader immediately solves a problem, the advisor becomes stronger while the team member remains relatively unchanged. The 1-3-1 framework reverses that pattern by using challenges as opportunities for growth.
The exercise also aligns closely with broader themes around ownership and leadership development. Individuals who consistently practice defining problems, generating options, and making recommendations begin developing judgment. Judgment, in many respects, is one of the most important components of leadership. Leaders are not simply people who know the answers. They are individuals who can navigate complexity, evaluate options, and make sound decisions in ambiguous situations.
The framework is particularly effective because it is easy to implement. Advisors do not need elaborate training programs or complicated systems. They simply need to change how they respond when problems arise. Instead of immediately supplying an answer, they can ask a few powerful questions: What problem are we actually trying to solve? What options do you see? Which option do you recommend, and why?
At the same time, the episode provides an important caution. The 1-3-1 Exercise should never become a barrier to communication. Urgent client matters, compliance concerns, cybersecurity issues, money movement requests, and other time-sensitive situations should be escalated immediately. The framework is designed for developmental opportunities, not emergencies. Additionally, newer team members may initially require guidance as they learn how to think through options effectively. Leaders should view the exercise as a coaching tool rather than a rigid rule.
Ultimately, the 1-3-1 framework represents a practical leadership development tool. It transforms everyday challenges into opportunities for growth. Instead of creating more dependency on the advisor, problems become vehicles for developing judgment, ownership, and leadership capacity throughout the organization.
The broader lesson is that leadership is not simply about having the answers. It is about creating more people who are capable of finding them. Advisors who embrace this mindset gradually reduce organizational bottlenecks, expand decision-making capacity, and build stronger, more independent teams. The result is a practice that can grow beyond the limitations of a single person and create greater long-term value for clients, employees, and the firm itself.
TRANSCRIPT
Aaron Grady, Advisor Consulting Director at USA Financial - Welcome back to the Rare Advisor Podcast, where we explore the recurring and repeatable activities that help financial advisors build stronger, more valuable, and more sustainable firms. I'm your host, Aaron Grady, and in a recent leadership series, we talked about creating greater ownership, developing your people, and building future leaders inside of your firm. Today I want to zoom in on one practical exercise that can help you begin putting those ideas into practice.
It's called the 131 exercise. It gives you a simple way to stop automatically solving every problem for your team and start using those problems to help them develop better thinking, stronger judgment, and greater ownership. If you're like most advisors, you probably didn't receive formal leadership training before you began building a team. Instead, you built your business by being resourceful, making decisions, and solving problems. And those abilities helped you become successful.
But as your firm grows, those same strengths can create an unintended problem. Whenever a team member encounters an obstacle, they bring it to you. You, as the leader, see the answer, make the decision, and send them back to work. In the moment, this feels efficient. But if you repeat this pattern often enough, the team learns something. They learn when I encounter a problem, my job is simply to bring it to the advisor. They don't necessarily learn how to analyze it.
Evaluate alternatives or make recommendations. Over time, you become the firm's default answer machine. The team remains dependent, and you become the bottleneck. The 131 exercise changes the pattern. And here's how it works: when a team member brings you a problem, ask them to bring you three things: one clearly defined problem, three possible solutions.
And one recommended course of action. That's one problem, three possible solutions, and one recommendation. Let's break this down. The first step is to define the actual problem. And this is more important than it may actually sound because people often bring leaders symptoms, frustrations, or several interconnected issues, but not one clearly defined problem. For example, our review meeting process isn't working. That's probably too broad for what we're trying to accomplish. A clearer problem might be review meeting preparation is frequently being completed the morning of the meeting because no one has clear ownership of the final preparation checklist. Now you have something specific enough to solve.
A useful question for you for you to use when you're doing this exercise is this What is the one problem we're actually trying to solve. The answer alone can improve the quality of the conversation. Next, ask the team member to identify three possible solutions. Now you may ask, why specifically three? And the simple answer is that because the first solution is simply the most obvious one, oftentimes. Because three possibilities force the person to slow down.
Think more broadly and consider different trade-offs. Using our review meeting example, the team member might suggest option one being assign the entire preparation checklist to one person. Option two, divide the checklist by role and create clear deadlines for each step. Or three, add a brief meeting 48 hours beforehand to confirm the preparation is complete. Look.
The solution doesn't need to be perfect. The objective is to teach the team member to move from identifying a problem to exploring possible answers. Then comes the final and perhaps the most important step. Ask this question: Which option do you recommend and why? This is important. Don't make the team member present three ideas to you and then immediately hand the decision back.
To you to make. Ask them to evaluate the choices, consider the consequences, and recommend a path forward. For example, they may recommend dividing the checklist by role because it creates clearer accountability for clearer accountability without adding another meeting. Now you can coach their thinking. You might approve approve the recommendation, You might modify it, you might ask a few questions that reveal something that they hadn't considered, or the conversation may produce a fourth and better solution. But here's the thing: either way, the team member has participated in the thinking, not merely delivered the problem. The immediate benefit is this: it creates better problem solving. But the long-term benefit is leadership development.
The 131 exercises teach team members how to Clearly define issues, think beyond the first available answer, evaluate alternatives and trade-offs, make a recommendation, and take greater ownership of the outcome. It also gives you insight into how each team member thinks. And that information is going to help you identify when someone's ready for more decision-making authority and whether they may still need additional coaching or more context.
Over time, you may even reach the pinnacle of this exercise at a point where a team member brings you their 1-3-1, and your response is simply this: I agree. Go execute it. That's how decision-making capacity begins to expand beyond the lead advisor. But here's a necessary word of caution. The one-three-one exercise should be a coaching tool, not a barrier to communication.
You don't want a team member withholding urgent client compliance, cybersecurity, money movement, personal concerns, because they haven't developed their three possible solutions. Some problems need to be escalated immediately. And newer team members may initially need your help generating the options. The goal is not to say, don't bring me any problems. The goal is to say, when appropriate, and that's the key word, when appropriate.
Let's use problems as an opportunity to strengthen how you think. And that distinction matters. So here's my challenge for you. At your next team meeting, I want you to introduce the 1-3-1 exercise. Explain to your team that when someone encounters a non-urgent problem, you want them to think through one clearly defined problem, three possible solutions, and one recommendation, including why they believe it's the best option.
Then the next time someone asks, What should I do? Resist the urge to immediately provide the answer. Instead, ask these questions: What do you think we should do? What other options should we consider? And finally, which one do you recommend? Because one of the most important responsibilities of a leader is not simply solving problems, it's developing more people.
Who are capable of solving them. The 131 exercise is not gonna eliminate every problem inside your firm, but it can change what happens when those problems appear. Instead of every issue creating more dependency on you, the advisor, each one becomes an opportunity to build judgment, ownership, and leadership throughout your team. Thank you again for joining me for another episode of the Rare Advisor Podcast. If you found this episode helpful, please like, subscribe, and share with another advisor.
who may be working to develop a stronger and more independent team. And as always remember, when the why is clear, the how becomes easy. So never lose sight of your why.
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The RARE Advisor is a business model supercharged by Recurring And Repeatable Events. With decades of experience coaching successful advisors, your host, along with other leaders in the industry, discusses what it takes to grow a successful practice. With the aim of helping financial professionals and financial advisors take their business to the next level, this podcast shares insights and success stories that will make a real impact. Regardless of the stage of your practice, The RARE Advisor will provide thoughtful guidance, suggestions for developing systems and processes that work, and ideas for creating an authentic experience for your clients.
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