Experience tells us that bullish stock markets will inevitably turn bearish: often, dramatically. Our Nov. 24 blog—“Buying High and Selling Low: Are you ready for the next downturn?”—suggested that the damage to independent advisory firms from failing to be prepared for the next down market almost always outweighs any growth gained during the tail end of a run up.
We still believe that these are risky times for advisory firms still in pedal-to-the-metal growth mode. Yet, we also believe that the advisory business has changed dramatically since the market meltdown in 2008: perhaps most of all, in its reliance on adding new advisors to grow, and to succeed the current owners. And, that this demand for younger advisors has created a shortage for the foreseeable future.
Consequently, whether owner-advisors feel a need to hire a successor now, or they wait until after the next downturn, finding the right advisor at the right price will continue to be a challenge. So much so, that hiring a professional recruiter is not really an option any more: You just need to do it. In fact, in the advisory world, employment recruiting has become such a specialty that we don’t do it in house anymore. But we do help our advisor-clients to find good recruiters and work with them effectively. It’s harder than you’d think: here’s what you need to know.
The biggest mistake we see firm owners make is in thinking that hiring a recruiter will help them hire an advisor faster. In most cases, it won’t. In fact, it will probably take longer. But that’s a good thing. Think of it this way: what would you say to a client who wanted to hire a financial planner who could give them a financial plan the fastest? Exactly. In the vast majority of cases, it’s way, way, way more important to hire the right new advisor, than it is to hire her quickly. (Believe me, we’ve cleaned up far too many messes created by advisors who hired someone too quickly.)
What a good recruiter will do is help you to hire the right candidate for you and your firm. Just like financial planning, hiring is a process: it takes time—and a commitment to do it right. The first step is to figure out what the right job candidate would look like. Most recruiters have learned that most employers are pretty bad at articulating what they are looking for in a candidate. To open that communication channel, after they’ve had a discussion to get a general idea, they’ll send a few resumes. Advisors who don’t understand the process, are often put off when this first round of candidates aren’t what they are looking for. In fact, it’s not unusual if we have to talk an advisor out of firing the recruiter at this point.