By Tony Vidler
Many financial advisory firms see the need to create leverage and handle their own succession issues through recruiting new advisory talent, and equally, many struggle to do it successfully. The main reasons why recruiting the right advisers for the future of the firm often results in frustration for all parties, and a parting of the ways, is usually because the big issues were not thought about and addressed. The big issues that do not seem to get thought about adequately are:
All 3 are inter-linked of course, and a great recruitment and retention strategy must get all 3 elements right.
To get of on the right foot it is important to understand the fundamentals of what is attractive to the future “greats”. To put it simply; great talent is attracted by opportunity. Great talent is retained by equity.
Offering an attractive pay-packet and a cool corner office is usually not enough to get the right talent. They want opportunity. Opportunity in the form of learning, growing, being put in front of clients or being shown how to attract the right sort of clients in sufficient volumes…these are examples of opportunities that are worth more than just a pay-packet. Putting food on the table and having a compensation plan that achieves that matters of course, but without the right opportunities being delivered as part of the deal a firm will only attract those who are chasing the pay-packet. They usually are not the right talent for the firm.
What is the opportunity that your firm provides for the aspirational?
The second part of getting the recruiting strategy right is understanding how to keep the talent. There is little in this business that is more frustrating than hiring a talented person and then investing countless hours and dollars in developing them, before watching them depart to join a competitors firm. Having that happen over and over is also incredibly expensive and inefficient.
Why did the talent leave?
Provided the promised opportunities were being delivered (and that is a BIG assumption, as that is often a reason for departure), it usually comes down to one of 2 things:
Great talent understands the concept of deferred compensation. Or the concept of investment in themselves. They understand that it is worthwhile taking lower up-front compensation if there is a genuine opportunity to create significant capital. They understand the power of equity, and the future it can provide them. Equity is the big carrot that keeps great talent incentivised, motivated and in-house.
Providing equity to the talent doesn’t mean today’s principals have to give away their own equity. We do need to outline a plan for how the talent either creates their own capital by staying the course with us, or show them how they can build equity of consequence inside the firm and how the transfer of ownership and responsibilities can unfold.
Equity is their future, and if we want to keep the best talent in our firm we have to map out their future with our firm.
This is where the development pathway becomes a critical step. We have to map out and show them what their development steps consist of. For example:
The detail in this example doesn’t matter in reality, because the pathway for a new recruit needs to be personalised. It needs to be relevant to them. This example however comprises of a mix of academic learning, soft skills development, learning product and supplier systems, mastering internal business systems and processes, compliance and ongoing technical training. The result of all of this?
Congratulations…you are now a fledged adviser in the firm. But that is all…you’ve just got to “adviser” stage. We need to lay out this pathway for every step of the evolution from talented trainee to Managing Partner one day down the track.
The final part of getting the right talent to join, and stay, is getting the remuneration structure right. That needs to reward the behaviours that our firm values.
An “eat what you kill” compensation structure that is entirely commission for new product sales will, perhaps not surprisingly, encourage people to only focus on chasing sales. Equally, a salary for providing excellent service will result in someone who becomes reactive and helpful with customers, but not challenging customers by providing thoughtful advice and alternative paths forward. Why? Because they are compensated for keeping the customer happy, and the easiest way to achieve that is to agree with them and never ruffle feathers.
Getting the remuneration structure right – aligning the talent’s behaviour with our firms values and goals – is a matter of being very clear in the first instance about what matters to our firm. What do we value, and what does success look like to us? Then we can work out what behaviours and actions the talent need to exhibit in order to help achieve those goals while maintaining the values of the firm. THEN we can begin to work out how we might pay them for those necessary actions….
…THEN we have created the dream job for the people who are the right fit for our firm. And we have a good chance of keeping them.
You may also find these posts useful:0