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Financial advisor consultant Angie Herbers

Practice Management > Building Your Business > Recruiting

Got a Hiring Crunch? Maybe Your Firm's the Problem

By Angie Herbers

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What You Need to Know

  • If you take a hard, honest look, you might find several reasons job candidates steer clear of joining your firm.
  • Financial professionals need to know they’ll be treated as financial advice professionals and not subjected to continual demands that they deliver up their family and friends as clients.
  • Culture and community are what elevates a firm beyond a punch-the-clock organization.

“I can’t find good people to hire.” Among advisory firm leaders’ most frequent complaints over my 20-year career as an industry consultant, the difficulty of finding the right talent is right at the top.

The “fierce talent for competition” has become a cliché in our businesses, and firm leaders often conclude that the only way to win this competition is to offer candidates more pay than rival firms. But there’s a different way to win, one that doesn’t involve writing progressively bigger checks.

There are plenty of young professionals and career changers looking for opportunity. As a leader, you can better attract and retain this talent by putting yourself in the candidates’ shoes and assessing the prospect of working for your own firm. If you take a hard, honest look, you might find several reasons job candidates steer clear of joining your firm.

They might include:

  • New employees are asked to generate business
  • Career paths are vague or non-existent 
  • Compensation rewards are vague
  • Professional work takes a backseat to administrative work
  • Candidates are expected to be experts in many areas (Read: You are seeking the perfect candidate versus accepting the reality that all people have strengths and weaknesses.)
  • There’s a lack of culture and community 
  • Employees aren’t trusted to manage their own time

Things like culture, career paths and room to grow are key considerations for job candidates. If working at your organization isn’t appealing as a long-term prospect, paying generously won’t help with attraction and retention. Money is a small part of the job profile, largely because it’s a short-term consideration.

To an extent that many employers don’t understand, quality candidates mostly take a long-term view when looking for positions. They want to see an appealing career path. They want to see the ability to grow professionally in a supportive environment. 

Candidates will quickly figure out whether your firm has a clear model for career advancement. They’ll know if you’re going to allow and help them to grow. If you ask new advisors to do administrative work when they’re trained as professionals, you’re sending the message that you don’t trust them to handle important responsibilities and grow. 

Business Aims vs. Financial Advice

You might wonder what’s wrong with expecting new employees to generate business. After all, that’s how most firm leaders started their careers. The problem is, asking new hires to bring in business makes your business sound unappealing. Who wants to work for a company that has a problem winning new clients? 

More importantly, new advisors tend to have training and credentials in financial advice. They don’t have degrees or experience in marketing and sales. Asking these folks to join your firm and do something that they’re not trained to do — and often not interested in doing — is setting them up to fail. And they know it.

Sales jobs and financial advisor jobs involve different sets of skills. Financial advice professionals early in their career need to know they’ll be treated as financial advice professionals and not subjected to continual demands that they deliver up their family and friends as clients. 

Furthermore, leaders’ insistence on hiring advisors who share their enthusiasm for selling doesn’t make sense. Why seek to hire someone who is a carbon copy of yourself and your skills? If you’re really good at business development, why not hire service advisors for current clients so that you can focus on generating new business for the firm?

There’s also the route of training a new advisor to bring in new clients. But it makes little sense from a business perspective to invest time training someone else to do what you have already mastered.

The Right Expectations

Just as firm leaders expect new advisors to sell because that’s what they themselves have had to do, many expect new advisors to be as knowledgeable about planning and investing as they are. But of course, it’s exceedingly difficult to be an expert in everything from investments to insurance to education planning to retirement planning at the outset of one’s career. Expertise takes time to develop. 

Many firm leaders have been in the industry for multiple decades, and have become strong generalists. But I’ve frequently heard such advisors voice frustration that their newer colleagues don’t know everything that they themselves know.

Time and time again, more experienced advisors will get angry because their new employee isn’t familiar with specific rules around investing or retirement distributions. In the process they discount all the knowledge and ability the younger advisor does have, opting to focus instead on what they don’t know. 

Expecting advisors to be fully formed right at the start of their careers is unrealistic. It reflects a certain amnesia about how long it took the firm leader to become the well-rounded expert they are. And it also signals that you yourself now know everything, which is not an attractive model for young talent: Who wants to work with a know-it-all?

But it also communicates something harsh about the organization’s culture. New hires want firms that will help them fill in their knowledge and ability gaps and support them in developing their careers. It’s usually more important to them than their current compensation level.

Too many firms signal that new hires are essentially expected to be self-sufficient. What they want instead is community, mentorship, support and the prospect of growth. 

Don’t limit your pool of candidates by looking for perfection. Focus on hiring people with core skills that your firm really needs, and then developing and training on additional skills.

Compensation, Culture & Community

Another turnoff for advisor candidates is a lack of clarity about the compensation path they can expect over the years. While candidates are told what their starting compensation will be, they usually aren’t informed about how their compensation will evolve as they take on more responsibility and become more important to the business.

It’s this all-too-common information void that leaves employees in the position of asking how and when their compensation will be increased. Often, firms don’t have a clearly defined plan. The firms that have clear compensation paths are the same ones that provide clearly defined career tracks. But too many do not.

A final reason that good candidates pass on working for firms is that they perceive a lack of culture and a lack of community. People want to feel good coming to work every day. They want to belong to a community where they have the ability to grow, not just financially but also intellectually and emotionally.

Culture and community are what elevate a firm beyond a punch-the-clock organization. These organizations trust employees to manage their time effectively. They don’t want employees who put in their eight or nine hours and leave for the day. They want dedicated professionals, and they usually get them. 

If your firm is struggling to find and hire the right people, it’s easy to blame competition from other firms or a talent shortage. But looking inward can be the start of more constructive outcomes, especially when you honestly evaluate whether your firm is offering what candidates most want. And what they want goes far beyond a paycheck.

Angie Herbers is chief executive and senior consultant at Herbers & Co., an independent management strategy consultancy for financial advisory firms.

Angie Herbers

@AngieHerbers

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