by Tony Vidler
One of the most common options for leveraging your professional practice is to hire more advisory personnel, however it is often a path to frustration and disappointment for business owners because it simply has not been thought through.
Everyone begins with great intent: the owner really does want new hires to perform well, do great work for clients, and make good money for themselves and the firm. The new hire usually wants exactly the same thing. However the most common experience is that the employment relationship becomes a temporary one rather than a permanent addition to the practice. Temporary may be a few years of course – but even a few years is usually insufficient for the investment in mentoring, support and professional development of a new hire to pay off.
Poor communication of expectations from both parties, combined with a lack of long term thinking at the beginning, tend to be the primary reasons. This cuts both ways of course; with the new hire often poorly communicating their career plan or aspirations and the business owner not thinking through what the new hire needs in order to be there for the long term in a profitable and fulfilling partnership.
In the absence of clear expectations there is typically a major relationship blunder right at the start when the wrong sort of employment structure is created.
Broadly speaking the employment relationship will begin with one of three models:
1. Dependent (totally reliant upon the practice for everything, including wages and management in an employee style)
2. Inter-dependent (partially dependent upon the practice; partially self managing in a partnership style)
3. Independent (minimal reliance upon the practice & significant autonomy, but a beneficial alliance approach)
Trying to create an Inter-dependent model when somebody really needs a Dependent business relationship for example, will ensure that the new Adviser doesn’t hang around. As will creating a Dependent relationship when Independence is needed.
Looking beyond this initial blunder however, too many business owners fail to recognise the evolutionary path that many advisers need to head down. It is totally rational for a new, early in career, adviser to need a Dependent relationship. And rather like “managing” teenagers, the business owner “parent” needs to be mindful of and anticipate when that level of dependency changes – and then be prepared to adjust the business relationship model to support and retain the adviser in the right way. It is to be expected that for many advisers they too will want an Inter-dependent or Independent relationship in time.
Understand clearly which type of business relationship model is necessary for the new adviser hire and structure the terms appropriately, and you have a good chance of getting them onboard and being happily productive. Recognise how and when that relationship needs to change and evolve, and you have a good chance of keeping them longer.