Recruiting Advisors: Fusion National Conference

Is your firm ready to take on new clients and new assets in the recovery?

The firms that will benefit the most from an economic recovery will be those that are poised to capture new clients and assets as that recovery occurs, according to Philip Palaveev, president of Fusion Advisor Network. How can firms prepare to do that? Palaveev and Jonathan McQuade, a practice management consultant at Fusion, spoke to advisors at a lively session on recruiting and employee retention at Fusion’s National Conference in Las Vegas on Tuesday.

A firm’s “capacity” makes an enormous difference in whether they are ready to bring aboard new clients and new assets, Palaveev reminds wealth managers. While the timing can be tricky, those firms that “have the people” will be able to serve new clients and grow as the recovery occurs. That “momentum from new clients” carries “fast forward” firms—the 10% of firms that will likely grow the fastest when the recovery opportunity presents itself—for years, he says. 

Why should a solo practitioner, for example, decide that now is the time to add a junior professional? McQuade argues that as a solo practitioner, an advisor is pulled in many operational directions and all of that distracts from moving the ball forward in the business development functions that are crucial for every firm. “Support advisors” can help there—as the owner can offload accounts to the support advisor, McQuade explains.

First Things First

Finding the right person requires tactics and strategy. First, create a high-level job description. If this is a replacement for a departing employee, think about what the firm needs now and over the longer term, rather than simply what that employee had done before, Palaveev asserts. This is a chance add special skills or knowledge that was missing or will be needed in the future. “Scrutinize the list” of duties to determine what could be given to an administrative staff person and what needs to be done by a junior professional staffer. Palaveev asks: “Is this a job for one person or more than one? Or is it a part-time person?”

“Shoot high,” Palaveev insists. Look for “a lot of experience, qualifications, formal training,” as this is the time you should be able to find people who are well-qualified. “Don’t have any reservations about yourself as an employer, just because you may be a small advisor.”

Small Firm ‘Advantages’

In fact, McQuade adds, having a small firm can be a plus: “Smaller firms have distinct advantages because [employees have a] chance to get really involved in the firm; they are not tied up in a [large firm’s] bureaucratic, tiered system. Let them know that ‘How you perform at a small firm will dictate how fast you rise.’”

Bringing in New Business

Owners want to bring in a new professional who can immediately be self-supporting, right? But, as Palaveev points out, the professional talent hierarchy—and availability—is like a pyramid structure. At the very top there’s a small triangle of senior advisors, business developers who can bring in new clients relatively fast. But they are few. ‘The tip of the spear,” Palaveev notes. What’s more, he says, wealth management firms are competing with wirehouse recruiting bonuses of “300% of trailing 12-months of commissions.”

“How do wirehouses pay for that?” an advisor asked. “Clients” end up paying for that, Palaveev and some of the session participants answered.

Why not, Palaveev suggests, bring in a junior advisor, the next tier down in the pyramid; a relationship manager, with “three to five years of experience…at $60,000 to $80,000 plus bonus,” (some might be worth $100,000), and turn over part of the client base for them to serve, freeing the principals to spend much more time bringing in new clients?

'Productive From Day One'

Turning over “B” or “C” clients to a junior advisor serves multiple purposes. In addition to helping them be “productive from day one” Palaveev explains, this helps them grow as advisors, building relationships with those clients and building the clients’ assets. It also provides a platform for the junior, with which they can begin to bring in their own clients. After all, an advisor serving 100 clients rather than 10 will be much more attractive to a prospective client. With the right coaching, that junior could, McQuade and Palaveev explain, grow to be a senior advisor or even a partner, responsible for developing business. In addition, with this kind of investment and coaching, Palaveev says, they “grow up” with you and “they will be very loyal.”

Vetting Process

You’ve created the job description, now seek the candidates through personal networks of friends, family and clients; advertise on the Web on CareerBuilders or BrokerHunter or through a recruiter (though that’s more expensive)

Dan Henry, of Henry Wealth Management, needed to replace a staffer and called on Fusion to help. With McQuade, he developed screens for CareerBuilders: “education, computer experience, CRM experience.” They “scored” those screens, whittling 120 responses down to around 15 candidates. Next, a “Facebook screen…lost a few there,” Henry noted, laughing. They Henry did a telephone interview with each of the 10 or so candidates left, bringing the top five or so in for a first “face-to-face interview,” Henry says. That includes having them “write their bio…[as if it was for] the firm’s website.”

The final candidates are given the “Profile XT” assessment, at a cost of $175., which indicates “how they are with numbers, verbally and how coachable they are,” Henry explains.

With luck, at that point you have your choice of a few top candidates. One advisor in the room suggested another screen to add as part of the hiring process: Have candidates authorize a “background check” fairly early in the process. Some will opt out, recognizing that problems will show up. 

Invest in Your People

“You don’t want an employee that’s dreaming of the day they leave you. You want an employee that’s dreaming of the day they become your partner,” Palaveev says. Invest time and coaching in your employees, he says. “The people that will contribute to your business are the people you invest in. They will grow.” And so will your firm.

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