A critical factor in the success of a financial advisory firm is its ability to attract and retain talented people. Don’t underestimate the value of having the right team to satisfy your customers and divvy up the workload.
Timing is key: If you hire new employees too early, profits can decline and cash flow can dry up. But if you wait too long to bring on a new hire, your commitments can outpace your capacity. Unfinished work starts piling up fast.
You should consider hiring new staff members — W-2 or 1099 employees — when you determine that there’s enough work to demand additional help, your existing employees are overwhelmed or customer service has suffered.
Additionally, your financial situation must be stable enough to manage the additional cost of staff. It’s important to hire new employees before you reach a workforce crisis, though, since it can take seven to 10 weeks to hire staff and even longer to properly train them.
Establishing and communicating clear career paths is crucial to attracting your new talent (W-2 employees) and provides clarity about compensation and advancement opportunities. The lack of clearly defined career paths for employees is a significant challenge facing advisory firms today. It causes two problems. First, young people, particularly those from underrepresented populations, are unclear about the potential for a career in financial planning. Second, professionals may not stay long enough because their path to advancement was never clarified.
A career path gives professionals reasonable expectations for their success and how they will benefit intellectually and financially at every step. Defined career paths attract employees to your firm for both the short and long term.
Define the Functional Groups in Your Firm
Financial advisory firms serve a variety of clients and take on many strategies, resulting in diverse organizational structures. These functional areas have a specific career path that supports the firm’s infrastructure:
— Financial advisory
— Service specialist (tax, estate, legal)
— Firm administration
If you’re at the point where hiring is a must for your firm, consider bringing on any or all of the following support staff members in the financial advisory and operations functions to help bear the workload.
Financial Advisory Support Roles
There are five financial advisory career paths in a firm, according to the Certified Financial Planner Board’s “Financial Planning Career Paths: Building More Sustainable and Successful Businesses” guide. Those include analyst, associate advisor, service advisor, lead advisor or managing director, and principal or partner.
The titles are intentionally generic since there are many variations in the titles for these roles. Here are some details on the analyst, associate advisor and service advisor roles, which help a firm build a sustainable organizational structure and position the firm for growth.
Analyst. This is an entry-level position that allows professionals to learn about the financial planning process. The analyst is a key member of the service team for clients and assists the associate advisors in the creation of financial plans for clients. This position is responsible for providing support in the areas of attending and documenting client meetings, providing direction for client actions and follow-ups, and monitoring client tasks and workflows.
Associate advisor. This is a technical position that focuses on drafting financial plans and developing analysis that can be presented by the lead professionals at the firm. This position is often responsible for providing expertise in the areas of data gathering, case design, and investment analysis and recommendations. The associate advisor acknowledges client communications and follows up with clients after meetings, keeping track of client to-do lists.
Service advisor. This position requires a certified financial planner, or CFP, designation and focuses on communicating with clients and responding to their needs. This step on the career path is critical as it sets the foundation for relationship management and business development skills. The service advisor is an important part of the team who facilitates the support system for financial plans to clients.
Operations Support Roles
Often the largest teams at an advisory firm, the operations and administration arm is an integral part of the strategy and success of the firm. For this reason, firms should dedicate time and attention to ensure that the operations team can attract and grow talent.
The operations team is integral in assisting the advisory team with implementing client recommendations. The framework for the operations career path can consist of the following four levels: operations or administrative specialist, senior specialist, team lead or director, and department leader. Two of those roles are detailed here.
Operations or administrative specialist. An entry-level position for new hires in operations or administration, these provide administrative assistance, such as writing and editing emails, drafting memos and preparing communications on the executive’s behalf. They also maintain comprehensive and accurate records, documents and reports; organize meetings, including scheduling and sending reminders; and assist the executive with the weekly planning of priorities.
Senior specialist. A higher level of the operations and administrative specialist role, this “senior” label denotes experience and the added responsibility of training other staff. Responsibilities include the execution of all daily client transactions and activity, and working with custodial and other professional interested parties on behalf of clients to complete client transactions and facilitate account maintenance items, open new accounts, and provide information and guidance. This staff member also coordinates the setup and ongoing maintenance of client accounts.
As your firm’s operations ramp up, and you think about hiring, remember that the financial advisory and operations support roles are key to the success of your firm’s growth and development. Hiring the right people today can reduce the number of people you’ll need to hire in the future. Candidates who are interested and invested in your firm will be open to growing in their roles as your business matures.
Employees who take ownership of their work within your firm will not only help your business prosper, but they’ll also help stabilize and improve your company at all levels of its growth.
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