HIRING A JUNIOR ADVISOR MADE SIMPLE A Guide on When to Do It, What to Do and How to Do It

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1 HIRING A JUNIOR ADVISOR MADE SIMPLE A Guide on When to Do It, What to Do and How to Do It Hiring a Junior Advisor Made Simple

2 Author David Allen once said, You can do anything, but you can t do everything. In business, as in life, sometimes you have to delegate tasks to someone else. To some, this comes naturally; to others, giving up control is even more difficult than pushing their nose closer to the grindstone. But there is a point when you simply cannot do more on your own. And between heightened client expectations, new sources of competition and the ever-changing role and immediacy of technology in the modern business let alone your aspirations for growth the hay can pile up fast. Well before you (or your sanity) buckle under that last straw, you should consider the benefits of hiring a junior advisor. Maintaining your competitive edge without going over it altogether is a challenge; it is not uncommon for advisors to become victims of their own success. If you fear you are in danger, don t worry take action using the ideas outlined in this guide. The sooner you start, the sooner you ll benefit from everything a junior advisor has to offer. You can do anything, but you can t do everything. 2 Hiring a Junior Advisor Made Simple For use with financial professionals only.

3 WHEN TO HIRE A JUNIOR ADVISOR A well-hired junior advisor can be a value-add to nearly any practice, providing growth unattainable without the extra help. But there are times when it s more of a necessity than a convenience. If you can check ANY of the boxes below because the following aspects of your business have been stagnant for a while or are not poised for improvement, you should consider hiring a junior advisor. I would like to improve my business s: PROFITABILITY If you frequently find yourself on the border between black and red, new talent could help ensure greater success. VALUE A junior advisor might be the defining factor in building your practice s equity. EFFICIENCY With the right support, your top priorities could become your only ones thanks to better time management and operational efficiency. GROWTH Additional support could allow you to attain sustainable growth. No boxes checked? You may not be in imminent need of a junior advisor, but you should still strongly consider hiring one if you can answer yes to one or more of the following questions: It takes you more than 24 hours to get back to your clients You missed your child s birthday or your wedding anniversary because of work Your revenue has been flat for the past 3-6 months Your client is quoting a friend s advisor as a source of information or approaching you with their ideas You are hoping to retire in the next 3-5 years Hire Jr. Advisor Grand Opening Succession For use with financial professionals only. Hiring a Junior Advisor Made Simple 3

4 THE THREE Rs OF SUCCESSFUL HIRING Once you ve made the determination to hire a junior advisor, you need a plan of action that addresses both your short- and long-term goals for your business. Remember that when you hire a junior advisor, you are working to attain: Increased equity in your practice A bridge to the future of the business The creation of a liquidity event for your business The security of your business legacy Be frank and detailed with your plan as it pertains to all of these goals. You can t hire the right person without having a specific vision of what you hope to have them help you accomplish. Then, plan in place, focus on the three Rs of hiring Role, Responsibilities and Reporting with the following: Identify your ideal candidate type and how he or she should fit into your practice s culture Define their roles and responsibilities for the short- and long-term will they handle mostly administrative tasks or take on client-facing duties? Allocate the funding and compensation necessary for the new hire Allocate sufficient office space for your candidate, and determine who will be their mentor and to whom they will report Create a program that includes reporting and measurement goals; your junior advisor will achieve more with solid coaching from you or another member of your team than without Consider what was or would have been indispensable information or resources to you when you first started out, and endeavor to provide it for your new hire. The better you prepare them for success, the more likely they will be able to deliver. ROLE RESPONSIBILITIES REPORTING 4 Hiring a Junior Advisor Made Simple For use with financial professionals only.

5 FINDING THE RIGHT CANDIDATE Deciding to hire and determining the type of candidate you d like to hire is one thing; finding that person can be a challenge. You might get lucky and have the right candidate find his or her own way to your door, or have a family member interested in joining the business. But in the absence of these rarities, you will need to take heart that the right person is out there and then take the following action steps to increase the likelihood and speed at which you find them. If you are willing to take an inexperienced candidate under your wing: Post the opening on the job board of local universities, community colleges or community outreach organizations Request a course catalog from a local school and contact professors or departments teaching relevant material (finance, business, economics); they may be able to put you in contact with qualified and interested candidates If you are looking for more experienced candidates: Filter through LinkedIn or use other online resources like Monster.com or Indeed.com, an employment agency that can find temp candidates for full-time hire (these resources can also help find candidates without prior experience) Start within your business network and put out feelers that you are looking to hire a junior advisor do they know someone who is not getting the support or opportunities they want from their current firm? You may need to go beyond your immediate network and broaden your pool of candidates; for instance, if you are fee-based, you might consider someone who is working on commission but looking for a change RECRUITING AN ADVISOR WHO IS ALREADY EMPLOYED It s truly an art to recruit someone from their current employer. Often the right candidate, not unhappy in their current situation, may not feel there is something better for them at this stage in their career. This is where a thorough understanding of your value proposition and your broker-dealer s support services comes into play. As you reach out to prospects, cater your pitch to their needs. What entices someone to leave an independent broker-dealer will be different than what might lure someone from a wirehouse, and different still from what might convince a college student to take the entrepreneurial route. For use with financial professionals only. Hiring a Junior Advisor Made Simple 5

6 DEVELOP A PROGRAM FOR SUCCESS Remember that the success of your junior advisor is dependent on the environment and resources you provide for him or her. Even a very promising candidate can founder without the right support, mentoring, and environment. He or she can also leave for a competitor firm after learning the ropes from you if not provided the right compensation structure (see page 9). You are competing for talented candidates to join your practice, and talented candidates can go anywhere. You need to be able to demonstrate the reasons they should work with you. Make sure you can effectively communicate your competitive advantage. Consider: Building a way for former mentees who are now advisors to share their experience of working in your practice with the new candidate. This could be done via video recordings, one-on-one meetings or telephone conversations. Using marketing materials from your broker-dealer to highlight their assets so the candidate feels confident about the size, financial strength and resources available to them. The right investments in your junior advisor up-front will pay dividends later. Giving them the best head-start you can will benefit you, your clients, your business and your work-life balance in the long-run. 6 Hiring a Junior Advisor Made Simple For use with financial professionals only.

7 BUILDING THE SUCCESSFUL PROGRAM PART 1: CROSSING T s AND DOTTING I s SORTING OUT THE DETAILS Before your junior advisor s first day and realistically, before you begin searching for a junior advisor you will need to have a clear picture of how they will integrate within your practice and how you will train them. In other words, how will you allocate the resources needed for their development and growth? Consider: Who they will report to and how often The team members they will be working with and who their mentor will be The training you will provide How you will structure the learning process Once you have covered these areas, you will need to determine their involvement in the following: Operations Compliance Client Service Marketing Education Office training (time keeping, record keeping, technology setup) Integration and role definition how the staff works together Reporting structure Registrations Processes and procedures Reporting Attaining other certifications Understanding of your book of business and who they will be handling/ what they will be doing Assisting with appointments and setting up meetings Reporting on growth or opportunity for the areas your practice focuses on Understand, adopt and leverage the marketing platforms offered by your broker-dealer Review and develop campaigns Measurement of results Product information on insurance or securities Attending seminars, webinars, one-on-one meetings Visiting your broker-dealer s learning center Research Remember that your broker-dealer will offer your new associate access to a platform that includes resources for marketing, education and research be sure to make the most of it Create an inventory of the resources you have on your own and through your broker-dealer Create a list of A and B clients so you have a working action plan for the junior advisor (see next page) Designate a backup or go-to person in your office if you re not going to be a hands-on mentor For use with financial professionals only. Hiring a Junior Advisor Made Simple 7

8 BUILDING THE SUCCESSFUL PROGRAM PART 2: CREATING THE PATH TO BECOMING A PRODUCING REP Your short-term goals for your junior advisor may be relatively modest, but the path to their long-term success begins on day one as well. If you are considering them a potential successor to your practice, you need to treat them like one, and teach them the softer skills that can take the better part of a career to develop. For the long term, focus on practice management and client engagement. If your new hire comes with the background and registrations to work with clients sooner rather than later, you may want to work with him or her as a team on client accounts keeping both your names on the accounts and giving your junior advisor center stage after about a year. Clients may feel more comfortable if they see the transition as the junior advisor taking on more responsibility rather than taking over. Of course, it goes without saying to be selective in the clients you choose to let your junior advisor work with. If you have a Pareto distribution with 80 percent of your revenue driven by 20 percent of your client base, start the new advisor off with the other 80 percent. Practice management support with day-to-day operations for inexperienced and experienced candidates: Support on research, investments and follow-up on client portfolios Marketing support Client support setting up meetings, providing analysis for your use General office support Client-facing support for more experienced candidates or after the first year of employment: Develop their portfolio of clients and a track record of growth Ensure that they carry out operational aspects of practice management Treat them and talk about them as a future successor to the practice 8 Hiring a Junior Advisor Made Simple For use with financial professionals only.

9 COMPENSATION IS UP TO YOU Just as no advisor wants to join a practice that is not going to offer them ample support, they are not likely to stick around without attractive financial rewards. If you re hiring someone right out of college, it will be up to you to invest in their growth and build their experience. You need to honestly assess whether you have the economic means to pay them at least a partial salary for a period of time possibly three to five years before they have the necessary registrations and experience to build a book of business themselves. Whether you hire someone with experience or not, you will need to invest in your new hire. Remember that while you are providing him or her with a career-making opportunity, they are providing you with a career-building one. That said, compensation truly is up to you, and there are a few ways to structure it. Salary Commissions Combination Profit Sharing Equity Benefits A steady paycheck may be particularly attractive to recent grads and advisors uncertain about the speed at which they will build their book They can be the proverbial fire under one s seat that drives greater productivity, and they require no outof-pocket costs from you A lower base salary with the promise of commissions could be the ideal (and more affordable) middle ground for you and your candidate Paying a quarterly dividend or yearly bonus based on firm profits can provide both the motivation and compensation to secure a strong candidate For a highly talented candidate or one you are grooming as a successor, an equity stake may be in order If you are in a position to offer traditional benefits such as health care plans, retirement plans, insurance plans or even group rates or discounts, you will have an edge over others recruiting in your area The best option or mix of options will depend on your means and your candidate. A solid compensation package will be critical in securing a top candidate even more so if you are in a competitive market. But remember that you may be able to deduct your junior advisor s salary, commissions, bonuses and non-cash compensation from your business s taxes. (Consult your tax professional for more information.) For use with financial professionals only. Hiring a Junior Advisor Made Simple 9

10 THE ONBOARDING CHECKLIST THE FIRST 30 DAYS While you might have a big-picture view of what your new junior advisor s first month on the job will be like, it s easy to forget some of the details that need to be ironed out to create a smooth onboarding process. Use the checklist below to guide your efforts during the first four weeks. Weeks 1 and 2 Define short-term and long-term goals together Review business and program plan Define their hours Determine how you will measure their progress (number of client meetings scheduled, amount of new assets brought in, new clients, increase in AUM, etc.) Schedule recurring meetings Assign reporting structure and timing Set up a schedule for training on operations, education courses, and platform review Determine top activities and general day-to-day support Sign non-compete and other legal documentation as required by compliance Provide client break-out list and action steps Conduct your weekly meeting Weeks 3 and 4 Help your junior advisor build their circle of influence Continue to maintain an open dialogue on day-to-day activities Review the capabilities of your broker-dealer technology platform and begin training Facilitate attendance at webinars and ongoing education in specific areas Conduct your month-end meeting and review to examine what s working, what needs improvement and plan goals for the next four weeks 2015 Cetera Financial Group, Inc /15 10 Hiring a Junior Advisor Made Simple For use with financial professionals only.