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Building the Business 101: More on Building Our Staff

Colleagues weigh in on the problem of finding the best employees for a small firm.

Veena A. Kutler and Annette F. Simon, 05/22/2008

This monthly series of articles describes the many steps and occasional missteps we have taken in building our financial advisory business, Garnet Group LLC. Currently, Garnet has eight staff members, more than 90 clients, more than $300 million in client net worth under advisement, and offices in Bethesda, Md., and Boston. Veena Kutler, CFA, and Annette Simon, CFP, are the managing principals in the Garnet office in Bethesda.

Last month we discussed our efforts to add to our staff and the challenges of hiring, training and motivating employees. Like other owners of small advisory businesses, we wear multiple hats: serving as financial advisors to our clients, managing and building our business, and tackling the task of a human resources management. Our article struck a chord with readers who are facing similar challenges; we received several e-mails from fellow planners that we're sharing with you this month, along with some expert advice we picked up at a recent NAPFA conference.

Reader Comments
One planner wrote:
"I recently read your article "Building the Business 101: Building Our Team" on Morningstar. For one, I must say that it is very refreshing to know that other firms our size have the same issues to deal with! The principal of our firm and I were talking early last week about many of these same issues. We have recently had our client service manager resign, giving us two weeks notice. Ideally we would have had this person be in on the training of the new client service manager. We talked about whether it was better to hire someone young, passionate, and eager to learn. Or maybe it would be better to hire someone a little more mature with more experience dealing with clients.

Anyway, I wanted to say thanks for writing the piece. Please share any additional resources you may use in making your decision as.we will be meeting over the next several weeks to make some of the same decisions that it sounds like you are going through. We also would like to include skills-testing in our hiring process this time around, do you have any idea of the types of testing that you will be doing? If you have any materials on this I would be particularly interested in learning more about them."

A local NAPFA study group member benefited from the disruption created by a merger at a larger firm and told his story: "Enjoyed your recent article, as always, and find myself with many of the same issues, though my practice is even smaller. Still, the time had come for me to consider getting help for the current workload as well as succession planning.

Beginning last summer I started advertising for an employee, including a posting in the Career Corner of the NAPFA Web site. I interviewed a few candidates but encountered some of the problems you mentioned. Your list of desirable characteristics was very close to mine, and fortunately an excellent candidate applied for the position, and after all the rituals, was hired and started last October.

J was employed by a much larger financial planning firm with more than 40 employees, and that firm was recently acquired by a large multinational corporation. When such mergers occur, reorganization soon follows, which sometimes makes for a "bad fit." In this case the new company was asking some employees to specialize in certain roles; J, however, preferred to remain a generalist, which led him to seek employment elsewhere.

While I had to stretch to meet his salary requirements, and couldn't match all the benefits provided by a large company, we were able to reach an accommodation. What I could offer was a chance to remain a generalist (J now wears more hats than he knew existed!) and an opportunity to move toward eventual partnership much faster than would have been possible in his previous situation.

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