Executive Summary
As financial advisory firm owners try to grow their practices, at some point the firm owner hits a wall where the only choices are to remain limited in size, or begin to hire. Yet the process of hiring a new junior advisor is difficult, given not only the different expectations that professional staff members (e.g., junior advisors/CFPs) have from administrative staff the firm might already have, but also because of the significant differences between today's "young" Generation Y advisors, and the more veteran advisors who are hiring them.
In this guest post, Gen Y advisor Mary Beth Storjohann, herself a "veteran" of financial advisory firms in many ways - having already worked for 5 firms in 10 years by the tender age of 29 - shares her own view "from the trenches" about what works and what doesn't work in trying to retain "NexGen" advisors. In a world where so much advice on hiring and retaining young advisors is driven by those who do the hiring - not those being hired - Mary Beth's perspective is illuminating in showing what Gen Y advisors themselves are thinking and looking for.
So if you're an advisor who's thinking about hiring a Gen Y advisor, or struggling to bridge the communication gap with your new advisor, this discussion will hopefully give you some ideas about what to do to better attract and retain new advisors in your firm. And if you are a Gen Y advisor, perhaps this discussion will give you a few ideas about what can help you succeed, what to look for in a firm, or even some suggestions that you can (gently!) make to your own firm owner about what the firm can do to help you both succeed.
Next year will mark 10 years that I’ve been in the financial services industry. There’s nothing too special about that except that I’m 29. I started in this industry in 2004 when I was 20 years old. I have worked at one broker/dealer registered firm, two wirehouses and two RIAs (one boutique, one mid-size), not including the fact that I recently launched my own RIA, Workable Wealth, geared towards Gen Y.
10 years and 5 firms later, I feel that as an often labeled “Junior Advisor” and a GenYer myself, there are a few takeaways from my experience that can be shared with both firm owners and new advisors on the do’s and don’t of incorporating Gen Y or “Junior Advisors” into your firm.
Note that this isn’t a post about succession planning or how to recruit new advisors. (Though Financial-Planning.com has some great resources on both.) This is about how to keep junior advisors at your firm once you get them there.
The Plan
Manage Expectations
As Caleb Brown of New Planner Recruiting indicates in this article, collaboration is key when it comes to managing Gen Y advisors. While this is a prominent message in our industry right now, the missing element has to do with managed expectations. Yes, Gen Y is keen on feedback and collaboration, but that doesn’t mean we’re looking for it on a continuous basis. What we’re looking for more than anything is a plan for what we can expect in terms of feedback and collaboration.
Some of the most frustrating times in my career have been when I’ve had no guidance on how to handle client cases, when to include management versus advisors in decision making, or just plain clarity around what my options were within a firm and who was in charge of determining my path. I didn’t have those in part because I didn’t know if I had the freedom to create and implement a system on my own, and also because there was so much disconnect with who was in charge of what or following which protocol, that it was hard to sort through and reach out to appropriate parties for feedback.
I’ve found that I (and my Gen Y counterparts) work much better in a firm where we know what to expect in terms of communication. For example, if as an Advisor you don’t want to or have the time to check in with a younger Advisor after meetings to provide them feedback, let them know they can expect a short e-mail from you with 3-4 of your takeaways and leave it at that. Or if you don’t want them just “popping” into your office when there’s an issue, set a protocol for them to stick to.
The key is to let Gen Y employees and Junior Advisors know how they can expect you to communicate with them and then act on it (just as you would with your clients). As a younger employee, we recognize that things come up and we’re not going to be a top priority, but that doesn’t mean that we want to consistently take a backseat. If you have to cancel a review meeting with us, then reschedule for a later date. If you can’t follow through on a meeting to review a project we’ve been working on, then let us know when we can expect to meet. The quickest way to lose the interest of an employee is to leave them hanging. Be direct, honest and even concise if you need to – just make sure you’re following through in one way or another to avoid a lack of morale.
Remember where you started
It seems that many Advisors these days are looking for someone to either take over their book, someone to bring in assets, or both. When it comes to these issues, I always like to ask Advisors to remember where they started. I love hearing some of the stories that go along with the careers of some of my mentors or old employers. The sales strategies, the insurance products, scraping by on a small income with their families.
That’s why it always shocks me when I hear that a new or Junior Advisor is expected to bring in new assets with a minimum household of $500,000 or $1,000,000. When did the standards change on where one should start? While landing a client of this size is a great goal, and may come naturally to some – it could be helpful to remember that at the time you started, your clients were likely in a different income and tax bracket than they’re in now.
Many Advisors have designed and built their practices so that they were able to grow with it. The disconnect I see in firms losing out on great employees and potential successors these days is not allowing them to grow naturally in their own market. At 5’3 and 29 – it’s not easy to connect professionally with clients who could be my grandparent’s age. One of my favorite clients endearingly called me “kiddo” every time we met.
This industry is built on relationships and trust. If a Junior Advisor is coming in and you see the potential for a great, long-term employee, what would be the harm in setting some lower parameters and letting him or her build their confidence by working with a handful of clients they relate to? A lot of us have gotten into this industry because of our desire to help people and just like you, we love the feeling we get when we assist someone with reaching their goals. When large household minimums or lofty standards are placed on us from the get-go, that prevents us from growing into the position and our own level of comfort.
Remembering where you started and integrating that into the career plans of your Junior Advisors will likely get them more invested in your firm (and at an earlier point). In addition, be sure to share the story of how you started with them. Most of us truly enjoy learning from and hearing about the experiences of those we work for.
Set a framework
We’re a profession that is all about clarifying and reaching goals. A good employer will work with you to set joint goals, not just hand you a list of items to complete. Junior Advisors want to meet your expectations, but they also have some for themselves and even though they may be considered “far-fetched” in some cases, incorporating an action item or two into your quarterly or annual review meeting with them will help them to see progress from a personal professional standpoint and the firm’s. (Side comment on the topic of quarterly or annual performance reviews: Make sure you have them. If you’re part of a firm that doesn’t set these up, your employees again have no idea what to expect from you and can look other firms for more consistency).
Once goals are set and mutually agreed upon, work backwards and lay the framework and timeline for reaching them along with steps to get there. Going back to the example above about bringing on new clients, if a Junior Advisor is tasked with beginning to bring on clients with a large minimum of investable assets, start by letting them bring in 1 to 2 clients below minimum to get comfortable with the sales and advising process. If possible, assign a sponsor (see more below on sponsorship) to talk them through their process of prospecting, following up, going for the “ask” and then the actual plan creation and implementation. In addition, allowing them to service a handful of your smaller existing firm clients will help them to build their client relationship skills and may even uncover additional assets for the firm.
In two of my previous roles, I was assigned as primary or secondary advisor on a subset of existing clients with varying levels of AUM. By simply providing the extra level of attention and service in a handful of the client cases, more assets were uncovered and consolidated into the firm. This not only provided me with a learning experience on my route to have clients of my own, but the firm gained additional assets and revenue and the client had an additional set of eyes of their finances. By setting goals 3-5 years out and laying the framework and steps to reach them, Junior Advisors will have a gauge with which to measure their progress.
Note: If you’d like more input on career and goal planning, Dave Grant recently wrote a great post on Smart Career Plans for Advisors posing some questions to ask of yourself and your employees.
The Environment
Mentorship vs. Sponsorship
Millennials want mentoring . The fact of the matter is that mentoring of any kind takes time and commitments from all parties involved. And as Sheryl Sandberg wrote in Lean In, forcing a mentorship that’s not a right fit can be uncomfortable for both parties involved.
Instead of assigning “mentors” from within a firm, new and junior Advisors should be assigned a “sponsor.” My husband serves as an Officer in the US Navy. He’s currently stationed on a ship in San Diego. When his orders transferred him to that ship earlier this year, he was assigned a Sponsor. He was able to meet with him, e-mail, and chat prior to even reporting for duty. His sponsor showed him the ropes, served as a guide to answer questions, gave input on how things worked, and helped to problem-solve when needed. My husband is now sponsoring someone who is transferring into his department. On the ship, sponsors serve a purpose of helping to integrate each other into the ship culture, provide guidance and input on issues, but they wouldn’t refer to each other as Mentors.
Having a designated guide or sponsor within a firm is great. Mentorship, though, can only happen naturally, and from what I’ve found it’s not always the best idea to be mentored from within a firm. There are agendas that may be pushed by either side, even though you may be trying to act in the mentee / mentor’s best interest.
If you're in search of a mentor (for yourself or your employee), look to relationships you already have outside of the office or seek out new ones through programs like the FPA’s Mentor Match. I took advantage of the program’s original rollout with the Women’s Group and asked to be paired with Brittney Castro of Financially Wise Women as my mentor, which turned into me gaining some amazing input and a great friend and resource in venturing down the path of starting Workable Wealth. I chose to participate once as a mentor and then again on this last round as a mentee and was paired with Barbara Kay, who is a phenomenal professional coach and provided valuable insight in my final days of launching.
Mentorship is a word that can be used loosely these days. If you’re looking to establish a long-term professional relationship with someone, it not only takes time, it takes initiative. Look for people you can learn from and ask their input on specific problems. Be prepared with details or solutions that you’ve considered. If you want someone to mentor you, their time is likely valuable to them, so ease into it and see if it’s a natural fit before asking “Are you my mentor?”
Create Your Own Learning Environment
In addition to sponsorship, providing a learning environment is key to retaining and integrating Gen Y and Junior Advisors. In my time at HoyleCohen, I can’t tell you the number of learning opportunities presented to me. From client case studies, to observing meetings, to participating and running meetings, there was a time when it felt like something new every day (which is what it should feel like in the financial planning world).
What I’ve observed here is that Junior Advisors need to ask to be included more. And if they don't already, encourage your Junior Advisors to ask to work on a solution to a client problem and compare work with the Senior Advisor. Ask to sit in on meetings to observe. Ask if you can take a look at the client file ahead of time. Ask to update the firm on the latest technologies and software available.
As a busy business owner and/or senior advisor running your practice, you may not think to offer these opportunities, and I don’t necessarily think you need to. The pursuit of knowledge by Junior Advisors should be just that, pursued by them. What firm owners and Senior Advisors can do, though, is be open to facilitating the learning, and encourage younger advisors to participate. Welcome their questions on client strategies and cases. Allow them to work on their own solutions and then circle back with you to compare notes.
I’ve worked with a few Advisors who have done this and it not only allowed me to go through my own strategic thinking process, but I was then able to compare and take away key points to use in future cases. An open learning environment paired with managed expectations can prove to be quite the recipe for a successful relationship.
Lift Up, Don’t Limit
I have two comments / stories here:
- Ageism is a two way street. Calling attention to a younger advisor’s age (or older for that matter) in a client meeting, in front of peers or professionals, and often in general is just plain disrespectful. I can’t begin to tell you how many client or COI meetings I’ve sat in with older advisors where a story, historical moment, or figure of sorts is being discussed when the “were you even alive then?” comment is made (and directed at me). Maybe I was or wasn’t, but the fact of the matter is that at that point, a comment is being made at my expense to make other people feel more connected. That’s not the best way to make someone feel like a “part of the team.”
- At one of the firms I was at, I was told by a Senior Advisor that I couldn’t sit for my CFP® exam until he was ready to sit for his. When that comes from the person writing your paycheck, what’s a younger employee to do? …. Likely get a different job!
It may sound like common sense, but we all say things from time to time that can truly affect our relationships with someone – and we may not even know it. Constructive criticism is one thing, but limiting a person due to age, gender, or lifestyle is likely to lose you an employee or two, no matter what their age. Be conscious and respectful of how you’re treating others.
The Strengths & Weaknesses
Encourage Ownership
As many of us know, high employee involvement and engagement can lead to a more committed and productive staff. Younger advisors will become more invested in the firm when they are allowed to take ownership of a project or change. (I believe this applies to employees of any company and not just GenY).
Personally, among other projects, I was able to spearhead HoyleCohen’s HC Gives Back program with another colleague, which gathers the firm together for quarterly and annual volunteer events that benefit the San Diego community. It launched at the end of 2011 and we have now made and delivered over a thousand sack lunches to the homeless, helped build a house with Habitat for Humanity, sorted food at the San Diego Food Bank, packaged over 5,000 meals with Stop Hunger Now, and more. Win for the company due to increased morale, team building and community recognition. Win for the organizations, causes and non-profits getting extra assistance. Win for me for building my leadership skills in organizing and executing multiple firm wide events and establishing community connections.
Tasking GenY with researching and rolling out a social media initiative, finding a more integrated CRM, or even developing and implementing a system to more efficiently handle quarterly reporting, can help them feel as if they’re a part of something. Capitalize on the strengths of younger advisors and allow them to contribute something unique to the company. I can say it’s definitely more fun to look at a company and think “I helped them to do _____” or to “meet ______ goal” than to feel stuck and stagnant.
The “Hero” Syndrome
A final note directly for Gen Y and Junior Advisors. Don’t always try to be the hero. As a junior employee or advisor, it’s normal to feel the need to “prove” yourself by taking on extra projects or requests. While these can been seen as the traits of a key employee, what I’ve seen happen (and have experienced) is that if (when) things get overwhelming, management or Senior Advisors don’t have a clue because it’s kept in.
Holding in problems or tackling issues on your own because you don’t want to rock the boat or look like you can’t handle things is not always the best route. First, you may be holding out for recognition that you likely won’t get (as you’re not cluing anyone in on all that you’re taking on) and second, sometimes there are situations that warrant the input of senior advisors or firm owners. For example, if you support multiple senior advisors and are feeling overloaded with tasks, work to prioritize and then grab your supervisor for a quick check-in on how you plan to approach the situation. Don’t look for them to solve your problem, but offer up the solution you’re considering and get their input. That shows that you’re taking initiative and being proactive and that you aren’t just going in to complain or have them “fix” something. Sharing the details and getting input is necessary to de-stress sometimes and a good employer should commend you for checking in to review your plan of attack instead of carrying on with anxiety and worry.
Ultimately, in order for any relationship to work, one must be flexible. Things don’t always go as planned and firms go through transitions. However, with managed expectations, communication, and an open learning environment, Junior Advisors should be able to actively grow within their careers and make an impact in both the firm and their client’s lives.
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wow, reading this makes me feel like my father, when in fact I’m only a Gen Xer…this column just reinforces the view that NextGen planners have an inflated sense of self worth and sense of entitlement. Instead of reciting your accomplishments for a charitable activity, how about quantifying how many times you answered the phone and spoke to a client so that the advisor did not need to. How many client meetings did you set, attend, and follow up with? How many financial plans did you prepare? Do the work and quit whining 🙂
What most financial planners fail to realize, including Rose Colored Glasses, is how highly trained many young advisors already are coming out of school. With the ability to get undergrad and master’s degrees in financial planning, financial advisors graduate with more technical knowledge than planners that have been practicing for many years. While they may lack client facing experience, some schools (ie. UGA and K-State) are now introducing programs that allow students to work directly with clients. The end result is the new crop of planners is ready to work directly with clients from day one. They see their role as a financial planner, not someone that answers the phone so the older advisor doesn’t have to. If you need someone to answer the phone, hire a receptionist.
Excellent response, Alan.
Rose Colored Glasses, it’s unfortuanate you feel that way about the Next Generation. Nowhere in this post does it mention that new planners shouldn’t put in the time and effort to benefit the organizations they’re working for. Fortunately for me, the companies I’ve been employed at have seen the value in the quality of advice and service provided (as a team member and advisor) – not the quanitity. This is a relationship business, afterall.