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Financial Planning > Behavioral Finance

Performance vs. Tenure: A Lesson in Employee Evaluation

By Caleb Brown

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Our recruiting firm reviews the job descriptions and career tracks of hundreds of firms each year, and one thing that continuously stands out is how often firms emphasize tenure as the primary driver for upward mobility.

We realize tenure is an important factor because someone may indeed need to be employed by the firm for a certain number of years to accumulate the skills needed to move up, but this shouldn’t be the only driver. Firms should also have an individualized career development plan in place for each member of their team.

Think of the career path as strategic and the career development plan as tactical. When creating these plans, firms should focus on manageable time periods, especially for newly hired employees.

(Related: CFP Board Launches Campaign to Attract Younger, More Diverse Advisors)

Here is an example of a career development plan for a young planner.

Associate Financial Planner

  • In this role, you will spend approximately 90% of your time developing your technical competency and supporting the planning team in servicing the firms’ existing and new clients.

  • After one week, we expect you to be able to access and perform basic navigation of our core systems including CRM, portfolio management, shared filing system and financial planning software.

  • After 90 days, we expect you to be familiar with all processes and procedures involved with the financial planning department.

  • After 180 days, we expect you to be able to give anyone in the firm a summary of any client. This includes state of residence, occupation, income, net worth, AUM and tenure with the firm.

  • After one year, we expect you to have completed 12 full financial plans using our financial planning software, and presented between 10% and 25% of the client meeting agenda items.

  • After two years, we expect you to become the financial planning software in-house expert, and presented between 25% and 50% of agenda items.

  • After three years, we expect you to train new team members in the financial planning software, and be presenting between 50% and 75% of agenda items.

These requirements, particularly any anticipated timelines, work best when mutually developed to avoid someone stating they were too lofty when performance is assessed later.

Even though it is the responsibility of the team member to take the initiative to complete these items, it is helpful for firms to affirm how they will support their staff development.

For instance, the career development plan might include steps the firm will take to help new planners achieve the role of lead financial planner, such as:

  • Immediately sit in and take notes in client meetings.

  • Listen to lead and senior planner phone meetings and pre- and post-meeting strategy sessions.

  • Observe planners’ written correspondence to clients.

  • Debrief a senior planner on your section of presentation agenda at least 48 hours prior to client meeting.

  • Observe 4-5 full financial plans, then begin completing them on your own.

  • Approve your education allowance for any type of technical or client communication training within your specified amount.

Clearly laying out expectations is the key to reducing frustration, while providing an actionable plan for team members to track their progress. The more objective the measures are, the better chance team members have of staying on track.

However, expectations cannot just be templated. Career plans will vary from employee to employee. Just because Employee A has performed the same role longer than Employee B does not mean that Employee A possesses more talent or knowledge.

A firm is not leveraging its true talent pool if it is promoting based on tenure and not merit.

If you have hired a “rock star,” they are going to exceed the goals you have laid out for them. Not acknowledging skill is the fastest way to drive talent out of your firm … or worse, directly into the hands of your competition.

— Read These Millennial Advisors Are Killing It With Younger Clients on ThinkAdvisor. 

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