After graduating from the financial planning program at Kansas State, I decided to become a business consultant rather than a financial planner. After working at a financial planning firm, I realized that the independent advisory industry did not have a “career track” for young financial planners like me.
Once the decision was made, I launched a consulting business to help independent firms create career tracks and other programs designed to turn young planners into competent financial professionals.
For 16 years, financial planning career tracks have been at the core of my work, including leadership career tracks, advisory career tracks, client-service career tracks and investment-management career tracks.
The ‘Diamond’ Model
About eight years ago, my work on advisory career tracks culminated in a structure that I developed, called “Diamond Teams.” In short, a Diamond Team is made up of one senior advisor, two lead advisors and one entry-level associate advisor.
A firm can include several Diamond Teams. Each team works with its own group of clients, and each member of a team has specific duties.
The Diamond Team structure allows clients to see the amount of time and effort that a group of advisors devote to their finances. But equally important, associate advisors are given a front-row view of what financial advisors do, how they present their work and how they interact with clients.
We’ve found that participating in Diamond Teams prepares young advisors to become senior advisors — and interact with clients — much more quickly than they would without it. As a result, their firms can handle more clients and grow more quickly.
Over the years, we’ve also found that the Diamond Team structure has provided a solution for another major problem that nearly all advisory firms face: haggling over the compensation of associate advisors.
Many of us want to make money. As most firm owners know, this is almost always true of young advisors fresh out of professional school.
As I’ve said before, though, many firm owners reduce their resources and hamper their growth potential by overpaying young “advisory talent.”
Diamond Teams turn this situation on its head. They take advantage of young professionals’ desire for career advancement and the corresponding increases in compensation — which turn out to be stronger points of attraction to them than a high starting salary.
Plus, Diamond Teams, with their clear, structured path of advancement — along with the opportunity to join real client meetings from day one — are far more appealing to most “blue-chip” professional-school graduates than higher salaries.
In addition, as young advisors see their knowledge and skills increase as they sit in on client meetings, they also find that their careers advance: from junior advisor to associate advisor and eventually to senior advisor, leading a team of their own.
With each of these promotions should come a corresponding jump in compensation, which strengthens the bond between the advisor and the firm and reduces turnover among professional employees.
I didn’t anticipate some of the benefits of Diamond Teams, though I should have. Most of us want a job in which we can grow professionally and advance in responsibility, regardless of the money.