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Sourcing Financial Planners

Where do you go to hire the right talent?

David J. Drucker, 09/18/2008

Independent advisors have for years lamented the fact that it's so hard to find good financial planning talent. You'd almost never know that more than 200 universities throughout the U.S. have financial-planning curriculums, not to mention placement programs.

Much has also been said about planners' difficulty in absorbing students and other new hires into their firms. It's still a shock to many that in order to grow, they must shed the sole-proprietor-wears-all-the-hats mindset and learn to manage both their business and the people in it. Hence, students with demonstrable planning and even client-interaction skills often find themselves sandwiched in between file cabinets in the advisor's back office doing menial work because the advisor can't see and exploit for everyone's benefit their true abilities.

The typical advisor response to the newcomer is, "Stop whining and pay your dues the way I did; you can't expect to be a financial advisor like me overnight." While the typical response is something like, "Yeah, but how do I make you aware of my skills? You've got me doing administrative chores that don't even acknowledge my readiness to help prepare client plans and to participate in client meetings!"

We can compare this phenomenon with parenting. Some of us had parents who were better role models than others. Some parents know how to help their children grow, while others are hopelessly self-centered, providing their children with life's necessities, but little else. We learn parenting from our own parents and, while some may vow to improve on what their parents did, we all repeat at least some aspects of our own parenting--good or bad.

Our hiring and development of employees is similarly constrained. If we never had good people-management role models, we need to get some training, find a partner who has adequate skills in that area, or forget employees and outsource work to independent businesspeople that aren't looking to us to play a role in their personal or professional development.

Yet, results of the brief survey I'm about to present suggest that some of us are learning the value of university grads and other young talent, as well as learning how to properly acknowledge and reward that talent. I talked with a dozen advisors and found they'd hired their last financial planner from these sources:

Universities (4)
Client or support service person already known to advisor (2)
Classifieds (2)
Related professions (e.g. CPAs) (1)
Professional association job exchanges (1)
Wirehouses (1)
Staffing agencies (1)

College Students
Dan Joss of Fox, Joss & Yankee, LLC in Reston, Va. recognizes the value of students coming out of CFP-preparatory universities and says his firm has hired two Texas Tech grads in recent years. Fox, Joss & Yankee evaluates the success of its advisors on the basis (among other things) of how they fit into its existing team culture, whether they are receiving positive feedback from clients and others employees, and whether the firm's lead planners are aware of an obvious savings of their time because of the assistance they get from the new hires. It would be difficult for new planners to meet the firm's criteria if they were being hidden in a back office and not being given substantive work. This obviously isn't the case at Joss' firm. New hires are expected to make a noticeable impact and to attract positive attention from the firm's leaders.

John Bird of Albion Financial Group in Salt Lake City, Utah, says his firm frequently hires MBA grads from either the University of Utah or Westminster College. And he makes good use of them within his company's well-defined career track.

"We presently have four financial planners, each supported by a paraplanner," Bird said. Their last hire was a Westminster graduate with some prior experience on the product sales side of the business. "When he joined us, he spent close to a year working as a paraplanner to understand the nuts and bolts of how we get things done within the firm, and also to demonstrate to us that he could work with the paraplanners as a collegial peer, not an ego-filled superior."

Although Bird said that he hires from local universities, he said that he gets an equal number of resumes from financial-services-sector job-hunters.

"Even when we are not contemplating a new hire, we will visit with many of these folks--both to give us insight into the kinds of people who may be available for hire and, second, on occasion we may come across someone we feel would be a great fit for our firm and in that instance we'll find a place for them and hire ahead of our growth curve," he said.

David Lewis, owner of Resource Advisory Services in Knoxville, Tenn., said that he gets his young planners from the finance degree internship program at the University of Tennessee. Different from hiring a graduate, hiring interns is one way to size up prospective advisors without making a long-term commitment.

"We want to know whether their personal aspiration is a match with my vision for Resource Advisory Services," he said.

Lewis is looking for interns who want to build a career in the field of financial planning and have a personal desire to help Resource Advisory Services achieve its vision. With this try-it-and-see approach, Lewis says one intern decided he really didn't want to be an advisor (better to find out before he's permanently hired) and another who thought she would pursue her CFP designation has settled, instead, into an "information systems" position with Lewis' firm.PAGEBREAK

"She is a tremendous resource in finding ways to use the technology we have and will probably be at the lead in our search for future technologies," he said. "At the same time, she truly comprehends the personal relationships we work so hard to maintain with clients."

What Lewis is doing right is understanding that just because a student has reached intern status doesn't mean he or she has irrevocably made a career choice; yet, giving that person flexibility within their intern assignment might turn up other ways he or she can of even more value to prospective employers.

Right under Your Nose
Sometimes the financial planner you need is right under your nose--which is often not where you would expect to find them. Carolyn McClanahan's outside computer consultant decided somewhere along the line that she wanted to try her hand at financial planning.

"She is very smart," said McClanahan, from Life Planning Partners, Inc. in Jacksonville, Fla., "but over time, we developed some issues with expectations and communication."

McClanahan said that she found an after-the-fact solution to her matching difficulties in the form of Caliper, a company that tests prospective hires for traits such as assertiveness, communication skills and ego resilience.

"I took the Caliper exam myself and had my employee take it too," McClanahan said. "Now, she and I both realize we are not a good long-term fit."

This gets us to a hiring strategy that takes on more importance depending on the size of the firm. In all firms, teamwork and cooperation are important, but probably no more so than in the smallest of firms, like McClanahan's. Oftentimes, if the owner understands himself or herself better, that person can do a better job of assessing and hiring complementary, cooperative talent. We all think we know what our own work habits and proclivities, but tests like Caliper or Financial DNA can teach us about ourselves in ways that make hiring the right person a more scientific process with a greater likelihood of success.

When Bill Blubiak, CEO of Cedar Brook Financial Partners, LLC in Mayfiield Heights, Ohio, was ready to hire more planners for his 60-plus-person firm, he looked no further than his client list.

"Because we have a full complement of resources to deliver on the planning and wealth-management model, the two clients we hired as planners were able to enter the business with no particular experience and lean on the resources of the firm to deliver a high level of service to clients," Blubiak said. While both employees have worked out well, "the one client who's been employed by us for seven years has done spectacularly well and is now the leading producer in our firm." PAGEBREAK

Blubiak said that his firm's "joint work," or team-based planning model allowed his client-employee to quickly gain an expertise in the planning business.

The Best of the Rest
Other advisors we spoke to hired from ads placed on FPA and NAPFA online job boards and Web sites like Monster.com and SuccessionRegistry.com, as well as from among the ranks of related professionals.

For example, Mike Palmer with North Carolina-based The Trust Company of the South hired his last CFA from a resume posted on the NAPFA Web site. After 18 months of interviews and Kolbe Index testing, Palmer was sure he had the right guy in spite of the hire's having been "an inside guy" in his previous position with the institutional investment firm at which he'd worked.

"He'd had no client-facing experience," Palmer said. "But he's quickly learned to handle the projects we've assigned him, and the feedback we've gotten from clients and other staff has been very positive."

What almost every one of these scenarios has in common is the existence on the part of the hiring advisor of a career track and/or well-thought-out process for absorbing and developing their new talent. In the end, one might debate whether a new hire's success is more the result of selecting one's newest planner from the right source or knowing what one is going to do with the employee after the hiring process.

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