Practice Management

Best practices for developing a new adviser

Consider your new associate adviser an investment to be tenderly grown over time

Feb 29, 2016 @ 11:21 am

By Joni Youngwirth

Whether for growth or succession, many advisers are wooing the limited number of new advisers coming into the industry. Far too often, though, young associate advisers leave a firm within three years, in part to learn, grow and develop; if you're lucky enough to attract one, you will face the challenge of developing the competence, talent and loyalty of that adviser. This may not be a big deal for large enterprises with a dedicated resource for this function, but for smaller firms, it is yet another responsibility competing for your attention and time. What best practices can help you more efficiently develop new talent for your firm?

1. Hire a CFP practitioner.

It's not uncommon for millennials to change not only jobs but careers multiple times — one reason for high turnover among new advisers. The profession looks good from the outside, but once they are familiar with what's involved, a new associate adviser may find that he or she doesn't like the selling, analytics or interpersonal component of the financial adviser's career.

To anticipate this challenge, concentrate on individuals who are already focused on this career path. Seeking graduates of CFP programs (with or without experience) helps ensure that candidates come to your firm with at least a conceptual understanding of the profession. Creating a written job description then clarifies expectations for the roles of the associate adviser and the adviser in each firm.

(Related read: Building an in-house residency program for nextgen advisers)

2. Create a written development plan.

Set expectations aligned with the job description. The adviser and new associate adviser should each create a list of the 10 most important things the new associate needs to learn this year, quarter, month or week. From those, look for common themes and then create experiences that give the associate development opportunities.

For example, if the associate needs to be able to conduct annual review meetings with “B” and “C” clients, list the most common components of a review, such as discovering the client's situation and goals, presenting the client's position on his or her goals, recommending appropriate action steps and following up as appropriate. The associate may need to observe the adviser in client situations, role-play discovery conversations with the adviser, and try supervised discovery with clients and so on to learn an effective process.

3. Use a 20-point system.

For associates responsible for developing business, a 20-point system can help focus time and energy. With a 20-point system, a list of revenue-generating activities is created, and each item on the list is assigned a point value. Each week, the associate's goal should be to earn 20 points. Asking for an introduction to a client's LinkedIn network contact might generate one point, meeting with a CPA might be worth two points, hosting lunch for a client couple and their neighbors might be worth five points, and hosting a client's retirement party may be worth 10 points. These are just examples; activities and points will vary based on the firm and the associate adviser.

4. Invest ongoing time with the associate.

Unless the associate comes with considerable experience, plan on holding weekly meetings with him or her. Treat the appointment with the reverence you would a meeting with an “A” client. Standing items should include:

• Discussion of development-plan progress

• Particular challenges the associate adviser has encountered

• Review of the upcoming schedule to identify new opportunities

• Observations of a particularly good performance or a performance that needs improvement

• Review of the prior week's 20-point system

• Check-in on job satisfaction

Track the topics on a progress chart documenting the associate's successes and work to be done. The new adviser should bring specific questions he or she wants to address.

For example:

• What words do I use to introduce myself as a professional to existing friends and family?

• How will we coordinate the transition of the Smiths to me next week?

• What do I say to clients who are worried about current volatility?

If the above development plan leaves you wondering when you will find time to do this, consider the alternative. When will you find time to go through the recruiting and hiring process again if your current associate adviser doesn't work out? It's a best practice to consider your new associate adviser an investment to be tenderly grown over time.

Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network.

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