Financial advisory firms may be looking to staff up a bit, but managers need to be careful not to hire candidates who could hurt their practices.
Financial advisers are getting flooded with applications these days for practically every available job. Thus, candidates must be closely scrutinized, Stephanie Bogan, president of Quantuvis Consulting LLC, said last week at the Financial Planning Association conference.
“You need to realize that the good people have jobs and they're not going to risk it to go somewhere else,” she said.
Advisers must complete thorough background checks on all applicants. Such checks should include an investigation of a candidate's criminal history, education, credit history and legal history, said George Tamer, director of strategic relationships at TD Ameritrade Institutional.
Recently, he spoke with an adviser who was ready to hire a candidate.
But in doing a background search, Mr. Tamer discovered that the applicant had lied about his education. The tipoff: The candidate's forged diploma had typos in it.
“People are desperate to get jobs,” Mr. Tamer said.
Once advisers weed out liars and lightweights, they can still find top-notch talent, industry leaders said.
“If there's a time to get the best and brightest, it's now,” said Frank M. Maiorano, chief executive of The Trust Company of America.
When hiring candidates, Ms. Bogan urges advisers to develop job descriptions that specify what skill sets are best for these positions. Advisers also must create goals for each position and then tie those goals to a defined incentive plan.
Too often, advisers don't devote enough thought to hiring or the compensation they plan to offer, Ms. Bogan said.
In fact, Lynn Ballou, an adviser with Ballou Plum Wealth Advisors LLC, which manages $170 million in assets, said that she used to approach hiring with an almost nonchalant attitude. “When I was incredibly busy, I'd just hire someone to have a body on the staff,” she said.
Ms. Ballou's compensation and reward model was also not well thought-out. She gave bonuses to poor performers.
Now Ms. Ballou, who also spoke at the conference, has a more-defined business plan and knows exactly what she wants when she looks to fill a job.
Once a candidate is on board, she has specific goals and expectations for all employees.
If they meet their goals, they receive bonuses twice a year. If they don't meet expectations, Ms. Ballou shows them the door.
“It's not fun to let someone go,” she said. But “at the end of the day, you have to protect your business.”
E-mail Lisa Shidler at [email protected].
