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Building the Business 101: Building Our Team

The hiring process is crucial to the survival of a small practice.

Veena A. Kutler and Annette F. Simon, 04/24/2008

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.

Lately in the Bethesda office of Garnet Group we've spent a lot of time discussing staffing issues. It occurred to us that many of our colleagues with growing independent practices must face the same dilemma.

Large firms have their own problems, but they don't face the ones that we as small businesses do in hiring and retaining staff. For a small planning firm, new hires are made on a one-on-one basis, with considerable time dedicated to finding a qualified candidate. We small businesses are our own human resource centers with the principals generally taking on the role of both screening and hiring. Then, even more time is expended (often by the principals) in training the new staff member. Staff changes, whether additions or departures, are a disruption to the routine of the smaller financial advisory practice. Employee training results in downtime, since the new employee is not yet up to speed while the trainer is slowed down and distracted from regular responsibilities. We estimate that it takes six months to a year for a new employee to get fully up to speed and become a productive team member--a very long lead time for a busy practice.

Our Staff Changes
In November, we brought on a new advisor, Laura, who has been a wonderful addition to our team. Then in January, our paraplanner, moved on--leaving us with three advisors and our client service/administrative manager, Andrea, in our office.

We decided to try getting by without replacing our paraplanner for a few months, by dividing her responsibilities between the four of us. Veena has taken back the job of preparing Morningstar performance reports for client meetings and has resumed trading with help from Laura. Annette and Laura are sharing the task of running MoneyGuidePro projections and preparing customized reports for client reviews. Andrea is now in charge of quarterly billing. We have outsourced some paraplanner functions like entering cost basis information for incoming securities into our database; others we realized were superfluous and have dropped entirely.

How is this working? The truth is, we're getting it all done, but we're all working more hours than we'd like. In March, we had an unusually high number of client meetings. This was followed in April by a flurry of tax-related client activity. Because of this, the three advisors were busy during the day meeting with clients and handling day-to-day work, then working nights and weekends preparing analyses and reports. At the same time, we have been moving a number of accounts to a new custodian, which has created a crushing administrative burden for Andrea and added to the issues we are all juggling. About a week ago, we came to the conclusion that we need help--soon!

Finding the Perfect Fit
Of course, realizing we need help is the easy part--determining what kind of help we need, and then finding a person who fits that description is so much more challenging.

We've had numerous debates about whether it's better to hire a younger person, straight out of college or with just a few years of work experience, versus a more mature person, perhaps someone re-entering the workforce after spending time as a stay-at-home parent. We've also considered whether we should get more-specialized help by hiring a recent CFP program graduate who might be able to hit the ground running. We see pros and cons to each solution.

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