Career Path: Associate Advisor

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1 Career Path: Associate Advisor Excerpt from Adding the Associate Advisor Position Guidebook AT A GLANCE The following provides a sample career path for an associate advisor within a Registered Investment Advisory firm. Partner Having made a significant investment in bringing on an associate advisor, you need to ensure you continue to build their engagement and motivation to drive growth for your firm over the long term. In a study of 1,200 top young managers published in the July August 2012 Harvard Business Review, a career development gap was identified between the support top young managers expect to get from their employers and the actual services they receive in the areas of mentoring, coaching, training and support from management. One way to increase engagement and minimize this gap is to develop a structured career path. By creating a career path, the associate advisor is given the opportunity for upward mobility and you are building value in the position and the individual. Lead Advisor Associate Advisor Support Advisor

2 Career Path: Associate Advisor Advisor Career Progression The associate advisor occupies the middle tier on the advisor path and typically reports to a lead advisor. The support advisor represents the entry point of the path. A support advisor may have previously worked in a client service capacity but this does not have to be the case. Also known as a paraplanner, the support advisor supports the delivery of advice but is not ultimately accountable for advice delivered. Support advisors will often report to, and be mentored by, associate advisors. Figure 1 puts the associate advisor role in context with two other advisor positions that typically make up a complete advice team and advisor career path. Figure 1: Associate Advisor Career Progression 2 Support Advisor Associate Advisor Lead Advisor Alternate Names Paraplanner Junior Advisor Senior Advisor Recommended Years of Experience or more Client Management No direct accountability for client management Responsible for management and retention of most relationship types Manage the firm s highest value and most complex relationships Advice Delivery Role Support more senior advisors in the delivery of advice Prepare financial modeling and advice documents under their guidance Handle many relationships independently Work jointly with lead advisors and specialists on more complex relationships Independently oversee advice delivery without direct oversight Business Development Support more senior advisors with business development activities Refining skills, occasionally developing business independently More frequently supporting lead advisor on business development Actively engaged in generating new client relationships Other Responsibilities Contribute to improving the efficiency and productivity of the advice team Mentor less senior advisors Contribute to improving the efficiency and productivity of the advice team Mentor less senior advisors Provide leadership within the advice function of the business

3 In general, advancement up the advisory path is determined by an individual s combined level of capability in four areas: client management, technical expertise, business and people management, and business development. Transitioning from Support Advisor to Associate Advisor Embarking on the development of an advisor career path within a firm should begin at the support advisor level. The support advisor primarily focuses on supporting more senior advisors in preparing financial documents, business development and contributing to improving efficiency within the team under the senior advisor s guidance. The position does not manage client relationships. Over time, the support advisor should transition into the associate advisor role, focusing on client management, business development, and holding independent client relationships as the role works jointly with the lead advisor. Advancing from Associate to Lead Advisor Progressing to an advisor with client responsibility is typically a gradual transition and can start from a planning associate or investment analyst role. Initially, associate advisors receive clients transitioned from lead advisors who have reached capacity. Change from the client s perspective is subtle their new advisor is a familiar face who has already been working with the household for some time in a support capacity. Over time, associate advisors will attract clients on their own. With training and mentoring from the firm s senior and lead advisors, the associate advisors will also grow their revenue base and manage clients more independently in preparation for advancement up the firm s advisor track. 3 The following is a sample advisor career path utilized by SignatureFD, an Atlanta based firm, which manages approximately $2 billion in assets for about 650 households. SignatureFD maintains 44 firm members across the firm and leverages a team-based approach to offer a full suite of wealth management services designed to meet the needs of high-net-worth individuals. Clients of the firm are served by four-person wealth management teams, consisting of an advisor, planning associate, investment associate and client care associate. This leveraged team model is designed to provide advisors the support and flexibility they need to emphasize their strengths and work on the highest priorities. The structure also facilitates a natural career path for team members to assume increasingly greater levels of responsibility.

4 Career Path: Associate Advisor Figure 2: Sample Advisor Career Path: SignatureFD Advisor, Level 1 Senior Advisor, Level 2 Managing Advisor Client Management Manages clients as assigned; responsible for at least $250,000 in client revenue Personally manages at least $750,000 in client revenue Personally manages at least $1,250,000 in client revenue Autonomy Works at the direction of lead advisors but handles planning process with minimal oversight Independently conducts financial planning process, including recommendations, without direct oversight Independently conducts financial planning process, including recommendations, without direct oversight 4 Business Development Developing business-generation and sales skills Shows initiative and ability to showcase the firm to prospects and referral sources Active participant in all aspects of firm business development activity Firm Responsibilities Coordinates with investment and planning departments Mentors and trains others; consistently contributes to improving department workflow Consistently contributes to the success of the firm, including firm management, meeting revenue goals and mentoring Source: SignatureFD, While this sample advisor career path is unique to SignatureFD, it may provide you with a structure and framework to begin building your own advisor career path based on the needs and preferences for your firm. By providing a structured and transparent career path, you can effectively set expectations with your next-generation talent regarding the skill sets and accomplishments required to continue to advance within the firm, plan for succession, and increase the value of these individuals over time.

5 About This Program Breakout Growth: Adding Key Positions to Unlock Growth Potential is an integrated thought leadership program designed to help you best position your firm for sustainable, transformative growth by focusing on defining, adding and integrating key positions specifically, the associate advisor and dedicated manager. This program will help you answer: How can adding dedicated management or an associate advisor position drive firm growth? When is the right time to add a new position? How do you assess affordability? How do you determine the appropriate compensation level? How much in additional revenue will you need to generate to support the addition of a new role? What are effective strategies for sourcing and onboarding new talent? About the Authors 5 About FA Insight Dan Inveen and Eliza De Pardo established FA Insight in 2008 in order to address financial advisors growing needs for business-building assistance. The firm works exclusively with financial advisors or entities that service financial advisors. Located in the Pacific Northwest, FA Insight research and consulting supports clients across the U.S. fainsight.com About TD Ameritrade Institutional At TD Ameritrade Institutional, we never forget that it s your business. We are here to support you in making it thrive. When you work with us, you will get the dedicated commitment of our people, access to a range of resources and a strategic relationship all designed to increase your potential and help you achieve your business vision. tdainstitutional.com

6 Important Information This material is designed for a financial professional audience, primarily registered investment advisors. This brochure is published for informational purposes only and should not be construed as legal or professional advice. TD Ameritrade Institutional disclaims any loss or liability that is incurred as a consequence, directly or indirectly, from the use or application of this publication. Third-party articles and information are obtained from sources deemed reliable; however, TD Ameritrade does not guarantee their accuracy or completeness and makes no warranties with respect to results to be obtained in reliance thereon. TD Ameritrade does not make recommendations or endorsements for any advisor that utilizes its brokerage or custodial services. TD Ameritrade does not monitor, and is not responsible for, communications between advisors and their clients. TD Ameritrade expressly disclaims any warranty or merchantability of fitness for a particular purpose, use or application and assumes no responsibility for any action the recipient may take (or fail to take) based on information contained in this guidebook. Neither this guidebook nor any recommendation made in it constitutes legal or regulatory advice. TD Ameritrade, Inc. and the aforementioned third-party companies are separate unaffiliated companies and are not responsible for each other s services or policies. All product and service names are property of their respective owners. TD Ameritrade, SignatureFD and FA Insight are separate and unaffiliated, and are not responsible for each other s services or policies. TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC/NFA. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank TD Ameritrade IP Company, Inc. All rights reserved. Used with permission. tdainstitutional.com TDAI 2871 SS