Outside voices and views for advisers

5 steps to elevate the next generation

Building a management team by elevating next generation professionals can be one of the most rewarding choices you make as a business owner

Jul 13, 2016 @ 11:47 am

By John Furey and Brandon Kawal

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As an independent firm grows, the role of an owner evolves from being a player on the team, to leading and managing an organization. Eventually, size and complexity will drive the need for greater professional management to help drive the owner's vision. Firms facing this need have three options: have the owner move into professional management and reduce responsibilities, elevate next generation professional talent from within or hire professional management from outside.

Elevating internal talent may be the optimal path for some advisory firms. For most, it is likely a combination where talented next generation professionals are elevated within the firm, and outside professional management is hired as a compliment. If your firm is in need of a diversified management capability, consider elevating the next generation to create leverage and return for the current founders/owners.


Talented professionals often have a desire and ability to influence a firm in multiple ways. For advisory professionals, this is a result of their direct impact on the relationship between client and firm. Other professionals may have a unique point of view on improvements that impact key areas of the firm. Elevating next generation professionals into management roles can further empower them to take action on improving the firm's effectiveness.

Advisory firms can enhance management capabilities through a combination of promoting internal and hiring outside talent. Chuck Bean, founder of Heritage Financial Services, chose to elevate and mentor internal professionals with a range of unique skills in strategic management, relationship and business development, and portfolio management, ensuring leadership in a number of critical management disciplines. To compliment the internal team, Heritage hired a COO and CCO from outside. Hiring outside leadership to help promote next generation management also frees up existing leadership to develop the business and continue leading the team.


Start with the end in mind to design the desired management team. Once you've established the future capabilities, follow these five steps to successfully elevate next generation professionals:

Define the intent. Define what the management function looks like and what gaps may be present. Let the internal next gen professional(s) know that there is a plan in place to elevate their responsibility in the firm, and seek to hire talented professionals to compliment the team. Finding an agreement upfront is also important, as not all professionals are looking to become managers. Without agreement, there will be no intrinsic motivation, and the results will be mediocre at best.

Document a plan. Create a written plan for developing the internal professionals into managers and what new hire(s) may be needed in doing so. The documented plan should begin with the end in mind. What is the desired state for the management team? What roles will the next generation professionals fill? Written plans create a sense of commitment, outline a path and establish clear expectations.

Find a mentor. Professionals do not move from contributor to manager without guidance. A mentoring process is an effective way to transfer knowledge. A mentor may be inside or outside the organization, but should be someone who will dedicate the time needed to guide the professional on transitioning into management.

Create incentives. Incentives will help motivate the professional to achieve the objectives of the plan. Incentives can be in the form of financial compensation or other perks, but should align with the desired behavior.

Start small and be intentional. Moving a next gen professional to management is not as easy as turning on a light switch. Have the professional lead a committee, contribute to strategic planning and/or take responsibility for a direct report. Whatever the action, be intentional with the selection and clearly communicate how it links to the end goal.

Building a management team through elevating the next generation professional can be one of the most rewarding choices you make as a business owner. Current owners can free up valuable time and increase future returns on ownership if structured properly. Invest the time and resources to elevate the next generation into management. You might be pleasantly surprised with the result.

John Furey is principal and founder and Brandon Kawal is a consultant at Advisor Growth Strategies.


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