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March 01, 2010 at 02:00 AM
Having done hundreds of recruitment gigs over the years, I thought I’d seen it all. But, recently, as I recruited a junior advisor for one of my long-time client firms, I was astounded at the quality and experience of the candidates. And this was for a job at a small practice. Yet, we found that we had our pick of six or seven very experienced young advisors wanting to leave, not just good jobs in financial services, but great jobs at large, independent advisory firms–jobs that three years ago, people would have killed to get.
Now that most advisory firms, large and small, seem to have turned the economic corner into a solid recovery, lots of firms are looking once again to hire junior advisors. The recession forced many firms to take a hard look at their employees–both professional and staff–and make the hard decision to let go some folks who clearly weren’t working out (although in better economic times they probably would have taken the psychologically easier route of simply working around these folks who probably never should have been hired in the first place). Now, these firms are looking to replace them with better, perhaps more reasonably priced, mployees to help them take advantage of the opportunities they’re seeing in the economic recovery. If my clients and other advisors I talk to are any indication, independent firms have nearly doubled their hiring from the healthy staffing growth rates of the pre-crash 2007 days.
Yet, as in many other areas, the employment experience of the largest independent firms has been quite different from the rest of the advisory world. Like their smaller colleagues, they may have used the recession to jettison some problem employees, but for the most part, their higher-net-worth clients and much larger revenue base allowed them to weather the storm with a little belt tightening on expenses and the slowing of growth initiatives and raises, rather than actual staffing cuts. However, their economic advantages seem to have worked against these big firms in the recovery: Their institutional-like cultures appear to prevent them from adequately rewarding their employees for their loyalty, hard work, and sacrifices in the aftermath of the meltdown (see my January 2010 column). And their HR failure has resulted in the best hiring opportunity the advisory world has ever seen.
High Marks, But No Raise?
The candidate my client ended up hiring for a support advisor position is a young CFP with three years experience at one of the largest, most successful independent firms in the country. He has so much experience with all of the standard planning systems, software, and procedures that he requires virtually no training–and in fact, can probably give his new colleagues a pointer or two. And we got him at what can only be described as very fair terms, considering his qualifications.
During the job interview, I remarked that he had a great job at a great independent firm and asked him why in the world he would want to leave: “I love my work,” he answered. “But they don’t compensate me well, and haven’t recognized my contributions during the tough times. I don’t feel like I’m part of the team.”
I found out that he’d recently had a performance review, during which the evaluation of his first three years was perfect: Highest marks across board. Yet the firm wasn’t prepared to increase his compensation, promote him, or make any adjustment in his career track. He didn’t even work directly with any of the firm’s senior advisors. And he didn’t think partnership would ever be a possibility.
