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Making the Most of a Mentor

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Financial advisors-in-training must be ambitious, gutsy and thrive on hard work. That’s just for starters. And who is best qualified to guide these rookies on their challenging journey to profit and prosperity? Somebody who’s walked miles and miles in their shoes: in other words, a caring mentor.

A successful advisor eager to mentor junior FAs is nothing short of a godsend, especially in today’s tumultuous market. Lucky indeed is the newbie who can boast of having a dedicated, concerned mentor.

“The ideal mentor is someone who truly cares about the other person’s success. It’s not just giving advice — it’s got to be that they roll up their sleeves, crawl inside that person’s head and heart, and figure out how they’re really going to help them. It’s like being a parent,” says David Hubbard, president of Exemplar Financial Network in Chicago; his broker-dealer is Financial Network Investment Corp., of which he is a principal. Hubbard has mentored more than 200 FAs over the past two decades.

With the profession’s steep learning curve and today’s big-picture, holistic approach to financial planning, as opposed to the transactional mode, it takes new advisors longer to build their books. To manage assets under a comprehensive plan, they first must develop a sound relationship with the client. Here’s where a conscientious mentor can be of supreme value, not only augmenting basic training but providing emotional support.

“It’s more difficult to develop relationships because of [today’s] longer ‘sales period’ than just calling and offering, say, a tax-free bond. That’s why mentoring is much more important today. The mentor’s role is as much psychological as it is tactical and [about] operations,” says Bill Slater, senior vice president, investments, and head of The Slater King Fitzenreiter & Murphy Group at Merrill Lynch in Washington, D.C. The team of nine manages assets of more than $1 billion.

Says Slater, who is on Barron’s 2011 Top 1,000 Advisors list: “I can look a financial advisor in the face and say, ‘I know exactly how you feel — I’ve been there.’ When you start to mentor a young advisor, they’re ready to run through a brick wall — in their mind, there’s no way they’re ever going to fail. But three months later they’re thinking about quitting the business. You need to build them up and get them excited again.”

Don’t Need One?

Junior advisors who turn down the opportunity to be mentored shortchange themselves. Usually, it’s ego that gets in the way.

“The biggest problem with newer folks is that they don’t reach out earlier to an experienced advisor. Someone that doesn’t want to accept your help is the biggest challenge to a mentor,” says Kim Hoffman, an Edward Jones financial advisor and regional leader, in Wilson, N.C., who has mentored numerous trainees over the past 17 years.

A myriad of large and small distractions can hamper a rookie’s progress. Enter: the mentor.

“It’s always nice to have someone to get you back on track, and that’s the role of a mentor,” says Cynthia Newman, Morgan Stanley Smith Barney’s Southern California regional director, based in San Diego. In her previous post, Beverly Hills branch manager — from which she was promoted earlier this year — eight bullpens of new FAs reported to her.

Jeffrey Dobyns was 22 when, in 1997, he joined Lykins Financial Group, a small CPA firm in suburban Ohio, to develop its investment business. He knew zero about financial services but was taken under the wing of 40-year CPA Ron Lykins, who taught him everything he knew about financial planning and business ethics.

“It was awesome. I was in Ron’s hip pocket. Not a day goes by that I don’t use a principle word for word that I learned from him. Having a mentor can accelerate your income level so much more quickly, if you’re willing to put your ego aside and be coached that first year or two. You learn more by observing than if you’re flailing around by yourself,” Dobyns says.

Having built a highly successful advisory business at Lykins, he left after four years to found Southwestern Investment Services, a subsidiary of Southwestern/Great America. Affiliated with Raymond James Financial, the independent Nashville, Tenn.-based firm manages assets of more than $1 billion. Dobyns, its president, has now mentored some 20 advisors himself.

Understandably, junior FAs are impatient to grow their practices quickly. But mentors set them straight: that isn’t the way it works.

“There are no shortcuts,” Slater says. “You’ve got to put in a lot of time, shake a lot of hands.” A mentor for 20-years-plus, he helps advisors who are assigned to him, as well as other FAs who contact him periodically for guidance.

Most of the latter, he says, are “trying to find ‘the secret formula.’ They want to know, ‘What did you do to succeed?’ My answer is that it isn’t about the investment process. It is: ‘Are you planning your day properly? Do you have an appointment every day?’”

Slater adds: “Getting in front of people is the most critical part of what we do. I tell every young advisor: ‘If you have an appointment a day with someone who could potentially be a client or lead you to one, you will not fail. If you do that for five years solid, you will be enormously successful for the rest of your life.”

Personality Matters

Good chemistry between mentor and mentee is essential.

“Mentoring is about personal relationships, where someone feels comfortable enough to ask questions they might not ask in front of a large group, and discuss struggles they’re having and areas in which they might be insecure,” Newman points out.

To encourage such confiding, the mentee obviously must trust the mentor. Newman says that she provided “a very safe environment. People have to feel that they are not going to be embarrassed or looked at funny or criticized or meant to feel stupid.” She’d urge them: “You don’t have to sugarcoat it. Whatever you need help with, just tell me.”

The ideal mentor needs to genuinely care about the mentee and, if compensated, not accept the role only for financial benefit. Indeed, some mentors, after a while, hand over smaller accounts to mentees. “If somebody is clearly willing to go that extra mile,” Slater says, “we’ll pass the account along and work in conjunction with them.”

It’s easy to see why the relationship between mentor — wise professional — and mentee — typically younger and new to financial services — is likened to that of parent-child. In the instance of Buckley Financial Planning, veteran advisor Fred Buckley actually is the father of his mentee, 29-year-old Sean. Each FA is independently affiliated with Securities America. Both the elder Buckley and the advisors’ broker-dealer are mentoring Sean, who came aboard last March.

“My father is helping me on all cylinders — with developing a network [of prospects], investment policy, creating financial plans. He’s given me goals. I’ve hit the ground running. But I know it’s a marathon, not a sprint,” says Buckley. “My dad constantly reassures me that if I keep doing what I’m doing now, it will happen.”

In the Ohio father-son practice, the advisors are located in different cities 90 miles apart: Fred, in Cincinnati; Sean, in Columbus. However, they travel to observe and participate in each other’s meetings. When that’s not possible, the two employ technology. Recently, when Sean was presenting a recommendation, “I video-conferenced with my dad through the iPad, and he was right there with us,” Buckley says.

Working in the same office with mentor Lykins, Jeffrey Dobyns sat in on hundreds of meetings. “Initially, I didn’t say anything because I didn’t know what I was doing. But what was brilliant about the mentorship was that over time, I was able to start to [participate] a little, then do follow-up work with the client, then hold meetings with Ron observing me. After a year of really good observing, I got to where I’d do all of it myself,” he says.

With the industry’s emphasis on client relationships, it is imperative that new advisors learn how to build them. And this is where a mentor’s help can be tremendous.

Hubbard, for example, queries newbies: “’Tell me about your week, your meetings — what you and the client said.’ I’m helping them reflect on what they’re doing,” he notes.

At Edward Jones, FAs try to launch a relationship each time they — literally — knock on a prospect’s door. Mentors are often at their side.

“We teach the advisors how to make face-to-face contact,” Hoffman says. Veterans and newbies take turns observing each other. Then the mentor critiques and offers suggestions for improvement.

“Lots of times new FAs ask questions that require only ‘yes’ or ‘no’,” Hoffman says. “So, much of it is teaching them to ask open-ended questions to keep the discussion going — not let it come to a dead stop — in order to learn more about the prospect’s needs and concerns.”

The best mentors try to keep rookies from making self-destructive mistakes. Operative word: try. Hubbard points to what he’s dubbed “Do-It-Yourself-itis, a terrible disease,” he says, that strikes when a new advisor, opposed to splitting commissions, refuses to pull into a case another FA with expertise he or she lacks.

“I had an advisor who never set up a qualified plan but then insisted on doing one alone,” Hubbard recalls. “It was a substantial engineering firm account. I advised him to bring in somebody, but he chose not to. He got the plan but missed a critical ERISA deadline. Then he called and asked if I could come and help him save the case. But by the time he got back there, the firm was already moving the business. That really demoralized him. It took a long time for him to build his business. I’ve seen this happen 20 times.”

In another cautionary lesson, Slater draws from his been-there, done-that to teach FAs, as he puts it, to “subtly seek rejection. I tell them not to be afraid to ask prospects the more difficult questions rather than be led along by someone who ultimately won’t get you anywhere.”

 Slater adds: “When you’re young and struggling, and get someone on the phone who’s willing to talk, and they talk a big game, you become a little scared to ask questions to see if they’re really willing to [invest] with you. So, [often],” he says, “nothing comes to fruition — and the $5 million client, key to making your hurdle and that you thought was a sure thing, just sort of goes away.”

MSSB’s Newman has warned many a new advisor: “Don’t call a large prospect your first month [in] production. First get comfortable and understand what you’re doing. Just wait a minute — there’s no rush,” she says.

Kicking off an FA career has perhaps never been tougher — but never has there been more opportunity. Consequently, mentee Buckley serves up these encouraging words for fellow rookies: “Oh man, don’t give up! It can be stressful trying to get clients. But if you’re trained well and believe in what you do, you’ll be successful.”  


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