"A man learns something carrying a cat by the tail that he can learn in no other way." With this quote Mark Twain insightfully illustrates a powerful point: Experience is the best teacher, though it's not always kind or gentle to the student.
The bullish markets and aging baby boomers have fueled remarkable practice growth over the last decade. Since many advisers are also baby boomers, adding advisers to handle a growing client base or provide succession planning options is essential for the growth and continuity of their practices. But most of these advisers are not ready to retire, and some plan to die with their boots on.
There is a growing lifestyle movement among founders: They've worked hard and feel it's time they began to live a bit more and work a bit less. But they are not ready to retire or remove themselves from their practices.
This evolving movement is creating increased demand for hires to support these founders. But finding and hiring an adviser is entirely different than successfully training and transitioning responsibility to one.
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The founder generation of advisers who now runs successful firms are self-driven and self-made. Most began their careers with an encouragement in the form of: "Here's the phone book, pick up the phone and make it happen." And make it happen they did. These advisers are entrepreneurial spirits who forged their own way while, at the same time, forming a profession.
There's just one problem: The advisers following in their footsteps have grown up in a different environment and time. These individuals have professional degrees and designations, and expect to join a service firm not a sales force. They expect compensation to be robust, yet not at risk. And they expect it to be determined in ways beyond the generation of new business. They want career advancement tracks, standards of practice and partnership equity over time.
The risk-reward relationship is fundamentally different between founder advisers and those following after them.
Many of those hired and in line to succeed are competent advisers who lack the ever-important entrepreneurial spirit and rainmaking skills. Founders are struggling to secure successors who can provide professional leadership, service top clients at a senior level and drive growth — all in the same person.
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I've had to coach founders through their trepidation, fear, judgment and lack of clarity about how succession planning, partnerships and M&A will successfully occur. I've heard plenty of: "When I started my practice I worked 12 hours a day 7 days a week," "This generation has no work ethic, they want to be handed the success I struggled decades to achieve" and "Where's the initiative, why isn't she rainmaking?" to know the mental pains that come with this process.
I've also spent time on the other side of the fence listening to the successors concerns, such as: "He runs this place like a cowboy," "She says I'm on the successor path, but nothing is in place," "He just won't share responsibility," "He expects me to read his mind" and "I don't want to work like a maniac; this isn't a sales shop, it's a professional career."
Even when there is high regard and respect at the outset, such hires are often ill-managed and too often fail, even though better outcomes were within reach.
The challenge is that the issues at play are largely invisible and almost always overlooked and undervalued. As I've shared previously, 80% of success is driven by mindset, meaning that the thoughts and beliefs founders bring to the process of hiring advisers — successors or otherwise — are the critical factor in the success of such endeavors. Yet, more often than not, mindset is missing from the conversation.
Founders seeking to hire advisers to gain back some of their time and freedom — or simply to add capacity to support their growing firms — will be well-served to become aware of the invisible, preconceived ideas they bring to the equation, understand how those beliefs help or hinder the process, and work to ensure they manage their mindset while also being thoughtful about their methods.
Lacking such a holistic strategy, many advisers are left holding the cat by the tail once it's out of the bag.
Stephanie Bogan is the CEO of Educe Inc. and has spent 20 years helping advisers unleash their potential to build successful firms and lives they love. Contact her at firstname.lastname@example.org.