My June Investment Advisor column (The Six-Week Solution to Succession Planning) just came out last week, and even I’m surprised at the flood of e-mails I’ve received from young advisors looking for new advisory firms—at least that are serious both about training and about succession. Here’s part of one email that captures the general sentiment:
“I am a late-twenty something CFP who has been working at an RIA [firm] since I graduated from college. I am not entirely happy at the RIA firm I currently work for. I work in the financial planning department, but am looking to move into an investment manager role. I am not sure I am at a company that matches up with my long-term goals/objectives, and wanted to reach out to see if you could help steer me in the right direction.”
Well, I’ll try. As my column suggested, it’s often very difficult for newly hired advisors to get a handle on what plans (if any) their new firm has for their future. Much of that is usually the firm’s fault (and, as I wrote, firms that do have a clear plan for their young advisors have a huge advantage in both recruiting and retaining their staff advisors). Yet young advisors can take their own steps during the hiring process and once they’ve started a new job to encourage firms to think more clearly about their futures.
In my experience, we all tend to resist making plans in every area of our lives out of a fear of locking ourselves in and thus restricting our options. I think this stems from having the wrong idea about the value of a plan. Of course, none of us knows what the future holds with any reasonable degree of certainty, so any plan that purports to etch in stone what we are going to do two, three, five or more years in the future is just silly—and doomed to failure.
Yet I’ve found plans to be essential for business success, if you think about them in the right way. That is, that a plan is nothing more than our best guess today about where we want to go, so that we can make a decision about the next steps to take.
Once we get into the future, we may (and probably will) see things differently; then we can make a new plan to tell us what steps to take at that point. As it turns out, we are pretty good at projecting the future out of our current circumstances—and we’re even better if we give ourselves the flexibility to make adjustments to new or unforeseen circumstances.
For young advisors, the point is that it’s important to have a plan about where they want to go: what they want to do today, and in five and 10 years from now. You can, and probably will, change your mind many times (I sure have). But having a plan today is very helpful in making a decision about what job you want, and which firm you want to work with.
One item that’s in virtually every young advisor’s plan is partnership in an advisory firm at some point in the future. That’s definitely something they should bring up in every job interview: What’s the plan for me to become a partner in this firm? If there isn’t one—or the answer too vague to have any real meaning—that’s a red flag: this firm isn’t serious enough about me to think about my future.
Young advisors should also ask about their training: What kind of advisor do they want to be in five or 10 years, and how are they going to get there? Your chances of achieving your goals are far better if you work with a senior advisor who shares your vision and has some plan for working with you to make it a reality.
Finally, perhaps the most important advice I can give young advisors is to really try not to make the same mistakes that led you into your currently unhappy job. Unless your current circumstances are just unbearable, don’t take another job just to take another job. Take your time: think about what you want—and what you want to be—so you can come up with plan that helps you find the right firm, and the right advisor, so it will be the last firm you ever work with.