by Tony Vidler
Hiring another adviser to join the team is one of the biggest (and most expensive) steps that any adviser takes in growing their practice.
It is expensive in financial terms, in time, and most importantly in energy and stress.
Getting it right is soooooo hard….and getting it wrong happens so often.
Often it is because only 1 or 2 of the essential parts to doing it properly are done.
Hundreds (if not thousands!) of books have been written on this aspect alone: how to choose the right candidate or person. There are numerous psychological profiling systems to provide guidance and insight into what makes a particular human tick, and what behaviours one can expect from them. You can test competency and knowledge, you can take them out to team-building events to see how the react and interact to stresses, and you can interview them exhaustively….and still be unsure about whether you have the right person. Perhaps you needed to look up their zodiac star-sign for some further insight….
Despite the promises of the books, the systems and the apps, nothing is foolproof in terms of guaranteeing you get “the right” person. So to give yourself the best chance of picking well:
If everything to date has checked out and it is feeling like the best candidate then it really is decision time. At this point be swayed by character and values and how you perceive the candidate will fit into your business in terms of complementary style, humour, work ethic and resilience. That stuff matters more than experience, qualifications, skills and references from strangers.
This is probably the area that advice businesses get wrong most often. Too high a proportion based on incentive or commission and a good candidate dies trying to get going. Too high a salary with too little expectations and a good candidate loses incentive to push and grow. These are obvious perhaps, but continue to happen frequently anyway.
The less obvious and more dangerous issue in getting the pay structure right is that of “rewarding the right behaviour”. Essentially people will do what they are rewarded for….and therein lies the problem more often than not in hiring an successfully starting new advisers.
If a remuneration structure is focussed upon just getting new clients, then expect that all of the energy and attention of the new adviser will be just upon that activity. Forget the concept of them looking after your existing clients – who they have zero relationship with. That is not the behaviour being rewarded so you cannot reasonably expect them to worry about that. Equally, if you are providing a reasonable salary and asking them to look after a group of clients, then it is unlikely that they will spend hours each week prospecting for additional clients.
To get the pay structure right means finding the optimal balance of salaries, benefits, support structures, incentives and commissions or bonuses that reflect the areas of focus you want. To get pay structure right there is a need for the practice to be very clear about what outcomes it is looking for, and what behaviours and actions are to be encouraged – and what actions and behaviours are to be discouraged.
Only when there is clarity about what the firm values in the way of performance from a new hire can a pay structure be designed to influence the new adviser to do the things that the firm values.
This is generally the critical area that leads to good hires not working out, and it is generally the firms fault for getting it wrong.
The final element is also one where firms often fall down….the ongoing management of expectations, skills and competency development, and activity on the part of the new adviser.
Following the mantra of “you can only manage what you measure” is a great principle here. You cannot manage the performance of a new hire if you have no criteria established for what constitutes an acceptable outcome, or what is an exceptional outcome. You cannot manage the performance of a new hire if you have no means of measuring progress along the way.
The measurements should of course be a direct reflection of the values, behaviours and performance outcomes that have been established during the pay structure design. Measurements can be set up in many ways over and above the simple “revenue generated” metrics too. Some examples of other good measurement areas might be:
If a good candidate is chosen at the outset and then supported properly in their induction and initial development there is a very good chance of them doing good work for you.
If the right pay structure is provided that rewards the behaviours that the firm wants from the new adviser, then there is an excellent chance that a good candidate will do a good job on the right things.
When ongoing monitoring, measurement and management are delivered by the firm then there is an excellent chance that a good candidate will continually grow better and more valuable at doing great work.