In the last post in our Coaches Corner series of blogs, we discussed the advantages of hiring an associate wealth advisor and how to go about molding the description of your position in order to find the perfect candidate. When looking for this ideal candidate, you must consider what role you want the person to fill and also what kind of personality would be best for that role.
After you’ve answered those questions and crafted a job description, it’s time to develop the next major piece of this puzzle: structuring a compensation plan. The first thing to do is think carefully through the compensation structure of your new position and ask yourself, “Would this attract the kind of high-caliber candidates I am looking for?”
Take a hard, honest look at what you have to offer. To find and attract the best talent and ensure your new hire fills the role you envision, you must appropriately incentivize the new employee. This may sound simple in theory, but the truth is that a compensation discussion entails much more than “How much do I plan on paying this person?”
Incentivizing a new employee is the foundation for establishing their behavior and their actions going forward. For instance, if you want this new person to focus part of each week on internal functions, such as financial planning or investment research, it may be good to provide some base salary for the time dedicated to those activities. Additionally, if this person is expected to provide outstanding client service to the clients you assign to them, you should consider paying the advisor a portion, or a split, of the revenue generated by the assigned households.
Finally, if you expect the new advisor to personally bring in new clients, you may consider allocating the same percentage of generated revenue for those clients versus the clients you assign internally.
All of these scenarios outline a plan that not only determines how the advisor spends their time, but also sets clear expectations on the overall role they play in your firm.
Is Your New Hire Bringing Along Clients?
Another factor to consider is if it is important or not the incoming advisor brings with them a book of business. If so, there are many questions to ask yourself to ensure a good experience:
Will these incoming clients belong to the firm or continue to be owned by the incoming advisor?
Are you willing to pay for this incoming book, or do you expect the new advisor to turn them over to you?
Do you want this advisor to be a W-2 employee or a 1099 contractor?
All of these are important questions to think through and can greatly influence what type of candidates you attract. Step back for a moment and take this approach. Decide what your ideal candidate would be worth. Then set up a job description and compensation structure that will support and foster the behavior you want to see. The better the compensation structure, the more qualified your candidates will be and, perhaps most beneficially, the more motivated your new hire will be to fulfill his/her role.
Motivation is crucial. While identifying the talent needed for a new associate wealth advisor is very important, answering the compensation question is equally significant. Without an incentivized plan, you won’t find the right candidate and your work to identify the ideal talent will have been a waste. Don’t underestimate the magnitude of this aspect when hiring a new associate wealth advisor. Adding valuable people to your team is the largest investment most advisors make, so choose your investment wisely.