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.”