Employers and employees need to be on the same page about what they expect from each other. (Illustration: A. Richard Allen/Theispot.com)

A while back, we found and hired an experienced advisor for one of our client firms. He had been an advisor at his previous firm for five years, but was still an associate advisor, creating financial plans and portfolios for the clients of other advisors. Despite being clear about his goals, his firm didn’t seem to be in any hurry to let him work with his own clients or put him on a track to become a partner — his ultimate goal.

Although he was very knowledgeable about personal finance, and was very personable with the firm owner, his co-workers and the firm’s clients, within a year, he started to become a “problem” employee: coming in late, leaving early, productivity declining, and generally appearing to be unhappy. In a conversation, he revealed that he had expected to be working with his own clients by then, and certainly within the coming year. However, although the firm was growing and the other lead advisors were becoming overworked, the firm owner had told him that he wanted to observe his work for at least another couple of years before he’d be comfortable turning over some of the firm’s clients to him, and that partnership was “too far in the future to think about now.” The advisor left that firm for a more promising job before we could straighten out the situation.

Most people think it’s better to hire experienced people rather than someone entering, or relatively new to, the job market. Of course, there are many advantages in hiring people who know what they are doing, why they are doing it and have done it before. Yet in our experience, more often than you would think, a younger person turns out to be a better bet: That’s because they usually don’t know what they are looking for, so they are easier to please — and harder to disappoint.

That doesn’t mean we don’t recommend hiring experienced employees. We do: as often as possible. However, we’ve learned that managing expectations from the start is the key to keeping good employees. When you’re hiring an experienced person, or if you’re an experienced person who’s changing jobs, you’ll have certain expectations, even if you don’t realize them. While we rarely get everything we want in life — either as an employer or an employee — if there’s a substantial disconnect between the expectations of an employer and an employee, both are in for a difficult time.

To bridge the gap between differing expectations, we work with owner-advisors to better articulate their expectations of new employees (and existing employees as well); and with prospective employees — particularly professionals — to uncover the things they are looking for in their new job that are most important to them. Here are the issues that we’ve found most often to be deal breakers if we don’t work to resolve them right from the start.

Keeping Professionals Happy

First, let’s deal with the issues of professional employees, like the guy in the above example: financial planners, financial advisors, investment advisors, portfolio managers, insurance and trust specialists, etc. Professionals usually fall into two categories: senior professionals and junior professionals. Senior professionals generally work with their own clients within the umbrella of the firm. Consequently, they tend to expect a certain amount of autonomy over the advice they provide and the way in which they deliver it.

Owner-advisors, on the other hand, understandably tend to want their advisors to deliver advice that is consistent with their own approach and advisory philosophy. Both the specifics of advice, and the way any conflicting approaches will be resolved, need to be discussed and worked out up front. If an owner is going to take a “my way or the highway” approach (and many do), both parties need to understand what that “way” entails and agree to it. All too often, professionals start with a new firm only to find after months or even years that their approach is incompatible with the firm owner’s.

Then there are issues of support and compensation. Most professional advisors expect a certain level of support in the many services that clients require. From setting up and maintaining client files, to back office transactions and reports to scheduling appointments to handling client problems, most professionals feel these issues are better handled by lower-cost clerical support, freeing them to spend their time on client advisory issues. They usually become very unhappy when they don’t get the support they expect. What’s more, lack of input over the quality of this support can also lead to diminished morale.

Compensation and performance issues are another challenge. Professionals’ compensation is usually tied to their performance in some way — the more revenue their clients generate, the more they make. Usually, all this is determined before they start their jobs. What isn’t always made clear are the ways this compensation is calculated and exactly what constitutes good performance. These are not issues that can be worked out later: If a professional employee feels their evaluations are unfair, the relationship will break down.

Finally, there’s advancement and, ultimately, partnership. As in my original example, timing is often the disconnect in these issues, but standards by which professional advancement are judged can also be a factor. It’s essential for good professional relationships that these standards be clear, fair and as objective as possible.

For junior professionals, the issues are usually more limited, but are no less important. Timing is key in managing their expectations, and once a timetable has been discussed it’s very important for firm owners to stick to them — or have a very good reason why they can’t. Training and client contact are also typically big issues with young professionals. Again, we prefer to use fixed timetables, and if adjustments need to be made, offer very good reasons for doing so.

Finally, the job descriptions for junior professionals are, if anything, more important than that of senior professionals (who tend to have more standard, clearly defined jobs). Most junior professionals see themselves as future lead advisors and firm partners. Being treated as “go-fers” is not going to endear the firm to them. For sure, doing many of the clerical jobs in the firm is good training for young advisors, but to avoid ill will, these tasks and the reasoning behind them need to be made very clear up front.

Support Matters for Success

Lastly, are the issues for non-professional employees, who generally fall into two groups as well: clerical and managerial. Owner-advisors often overlook these positions when thinking about training and development, career paths, and incentive compensation structures. Yet, in our experience, high turnover among a firm’s non-professional employees can affect a firm’s growth and client service quality just as much as losing professionals.

To keep managers happy, it’s just as important to have clear job descriptions, including their responsibilities, authority and career paths (or clarity about the lack of advancement). Because managers at advisory firms generally don’t have career advancement to look forward to, other things become more important to them: compensation (based on performance), increased responsibility, and recognition and respect for their contributions to the success of the firm.

Finally, there are the expectations of the support staff. Again, because they don’t have professional aspirations, firm owners and managers need to understand what these employees expect from their jobs and what will make them happy. Remember: Turnover even at this level can greatly affect the success of the firm. We find the most successful firms keep their support people for a long, long time.

Most important to keeping support staff satisfied is recognition for their contributions, which goes along with incentive compensation (we find bonuses based on firm revenues create the highest levels of teamwork and the sense that “we’re all in this together). It’s also key that everyone in the firm feels that it and its leaders believe their job is important by providing them the training and the tools they need to do good jobs, and by reminding them that what they do is important.

As I’ve written before, the most successful owner-advisors understand that the success of their firms depends on the success of their employees: from their senior advisors to their receptionist. Firm owners need to clearly articulate their expectations, from the culture they want in their firm (honesty, cooperation, integrity, responsibility, communication, etc.) to exactly how each employee’s performance will be measured — and rewarded. Firm owners need to treat those employees with fairness, respect and concern for their well-being and happiness. Clearly articulating an owner’s expectations, and making the effort to understand the expectations of their employees, goes a long way to establishing the trust that is the foundation of successful advisory firms.

— Read “Great Expectations Can’t Be Met Without Leadership” on ThinkAdvisor. 

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