You’re the Boss

You’re the Boss

Growing from a practice to a small business means hiring support staff. But for many financial advisors, moving into the role of employer and manager doesn’t come naturally. Here’s some tips.

Turnover among Lynn Faust’s four-person support staff is low—and no wonder.

Faust, senior vice-president of investments at Raymond James & Associates in Greer, SC, leaves nothing to chance when it comes to hiring—and retaining—employees. She crafts detailed and specific job descriptions with tasks that can easily be measured, uses personality assessments to help screen candidates and incentivizes them to stick around by sharing a percentage of net production.  “I don’t just follow my gut” when it comes to staffing, says Faust, whose team has about $300 million in assets.  “You need a process.”

Unfortunately, Faust is the exception, and not the rule. “Too often, there’s no strategy at all when it come hiring and retention,” says Andrea Schlapia, who heads Ironstone, a practice management coaching firm in Roswell, Ga.  More small advisory firms looking to hire support staff need a systematic approach that covers pinpointing job duties, providing appropriate compensation and a host of other factors.

The first step is something basic: writing job descriptions. But there’s also a science to it. For Faust, for example, the key is also making sure they include detailed tasks that make it easier to evaluate employee performance. About 70% to 80% of every job description includes measurable tasks. That includes even small duties like sending out “save the date” reminders to clients at a specific time.  “This business has a lot of subjective in’s and out’s to it,” she says. “But you have to be able to specify you did this, you didn’t do that.”

At Sullivan, Bruyete, Speros & Blayney, a McLean, Va-based firm with a non-advisory staff of 10, job descriptions also serve as the basis for career paths. To that end, according to Mark Johannessen, managing director, the descriptions include three parts: What experience you need to get the job, what duties the position involves, and what employees need to accomplish to reach the next level.

When you’re ready to start interviews, don’t stop at one meeting. Start with an initial screening done over the telephone, then make sure to include an in-office conversation, as well as a lunch with other staff members. “It’s easy to show up one time and make a great impression,” says Schlapia.

You can also include personality tests and other assessments to help figure out whether a candidate is suitable. For its part, Pinkerton Retirement in Coeur d’Alene, Idaho, a firm with $300 million in assets and 20 employees, 16 of whom are support staff, uses different tests at different stages of the hiring process. The first 30 to 50 applicants generally come into the office to take tests in math ability and typing skills, depending on the job. Then, those who make the cut are interviewed by management and the ones who seem like a good fit take a series of personality assessments. Those results are compared to the responses of assessments previously taken by staff members in the particular department the candidates would work in.

Hiring the right people is only part of the battle. Next, you need a process for training new employees. Schlapia recommends a 90-day schedule during which the staff member gets constant feedback.  But it shouldn’t stop after that time period. She suggests providing feedback every 90 days for all employees to identify potential problem areas before they get more complicated.

In addition, put systems in place to minimize misunderstandings and boost employee satisfaction.  “You spend as much time together as a family and it keeps the tension down,” says Faust. For that reason, employees have to work out disagreements among themselves. If they come to her without doing so first, she’ll send them away.

At Pinkerton, each department has its own processes. If anyone wants to make a change, then it has to be discussed not only within the department, but also with other teams that are likely to be affected.

Delegating a certain independence to each team, yet insisting lines of communication remain open, keeps the boss from micromanaging employees which helps foster an environment of respect. In addition, “Being the lead rainmaker is a time-consuming job. I don’t need to be drawn into day-to-day operations,” says Faust.

Regular meetings are also important; weekly meetings to set the agenda for the next five days are a good idea. But also consider holding an annual out-of-the-office get-together to discuss long-term strategic planning that includes non-advisory staff. “People like to know they’re an integral part of the company and their role is important to moving the company forward,” says Ellen Konsdorf, an executive business coach with Peak Advisor Alliance in Omaha.

The compensation question bedevils many small businesses. How much do you pay for talent? Best is to start with industry surveys to determine the parameters. At the same time, you need to consider long-term employee costs – including bonuses and raises. “If you have someone at a firm for 20 years getting a 3% annual raise, that person is going to be grossly overpaid,” says Brandon Odell, director of business consulting for The Ensemble Practice, a Seattle consulting firm.  Instead, give each job a pay ceiling and then, if necessary, provide other types of extras, like upping the contribution to a 401k or noncash bonuses that fit the person’s preferences—going to a conference, say, or paying for a night out with a spouse.

Some advisors offer the chance to earn a cash bonus. Faust, for example, ensures that anyone on the team who is licensed, including administrative employees, can earn a percent of net production in every paycheck. Similarly, five years ago, Kerry Bubb, president of KWB Wealth Managers Group, an LA firm with $200 million in assets, started giving all employees, including his operations manager and four non-licensed staff, a percent of revenue growth. According to Bubb, it’s boosted productivity. “They’re motivated to help grow the firm and make sure they can do the work well, since hiring more people means a smaller per-person bonus,” he says.

Another approach is to give rewards for tenure. At Pinkerton, after five years with the firm, the company pays for employees to take a vacation anywhere in the U.S., except Hawaii.  After 10 years, that’s expanded to include Mexico; after 15, it can be anywhere in the world.

Ultimately, expect the whole effort to be a constant work in progress.  Although Faust introduced job descriptions ten years ago, “It’s an evolving process,” she says. “You’re always refining and finding ways to make it better.”

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.