While advancing a career in any industry can be challenging, the lack of formal career development programs offered in the workplace for associate advisors can make it particularly difficult for them to gain the experience they need to become lead financial advisors. And since managing the client relationship – a key responsibility for lead advisors – relies so heavily on nuanced ‘soft’ skills that are gained only through direct experience, finding ways to get hands-on experience is crucial for associate advisors to demonstrate their value and gain the skills to advance in their careers.
In our 113th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss what it means to be a lead advisor, the paths associate advisors can take to advance into a lead advisor role, and how to communicate career growth goals with senior advisors.
While different firms may use different titles, the common theme of all lead advisor roles goes beyond providing advice to the client to managing the client relationship. This means actively engaging with clients to create an exceptional client experience, managing expectations, ensuring that questions are answered, and resolving issues in a timely manner. And even though there may be numerous books on managing relationships, there are few resources that actually offer associate advisors the opportunity to apply the information in the workplace. Which means it’s essential for them to take a proactive approach to find those opportunities, most often in the forms of hands-on experience (e.g., working with clients directly) and observation (e.g., participating in client meetings led by senior advisors).
For associate advisors who don’t (yet) have the opportunity to work directly with clients, communicating their career goals and positioning themselves as an asset that lead advisors find valuable can benefit both the associate and lead advisor. For example, the associate can ask to gain experience by attending meetings and taking meeting notes; this allows the lead to focus more on the client, who can also ask the associate to draft follow-up emails. And by asking for increasing responsibility to handle tasks that smaller clients may need, associate advisors can eventually gain the confidence of lead advisors to be permitted to gradually take over those relationships, freeing the lead advisor’s time to focus on the more complex needs of larger clients.
Ultimately, the key point is that a proactive approach to seek hands-on experience can position associate advisors for a successful transition into the role of a lead advisor. Becoming more involved in client relationships can demonstrate their dedication to the firm while gaining the valuable experience they need to advance in their careers. And by clarifying and communicating their goals for professional growth, associate advisors can also assess how the firm will support their growth aspirations or whether considering opportunities elsewhere might make more sense… helping them to create a better, more fulfilling career as a financial advisor!
***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.
- G2: Building the Next Generation (Bloomberg Financial)
- Kitces & Carl Ep 76: Overcoming Imposter Syndrome By Truly Building Confidence In Your Own Value
- #FASuccess Ep 014: Validating Your Advisor Value Proposition And Overcoming Imposter Syndrome With Carl Richards
- Amplified Planning’s The Externship (Hannah Moore)
- Best Practices For Running A Financial Planning Internship Program (And Creating A More Productive Outlook)
Kitces & Carl Podcast Transcript
Michael: Well, hello there, Carl.
Carl: Greetings, Michael Ernest Kitces XVII.
Michael: No, there's only one.
Carl: That's true. And thank heavens for that.
Michael: That would be fun. That's cool. I still think it would be cool to clone myself.
Carl: Imagine trying to keep up with weekend reading if there was more than one.
Michael: Well, to be fair, I already buffer everyone from weekend... My reading list is a lot worse than what you see in Weekend Reading.
Carl: I'm sure of this. This is a condensed version.
Michael: You’re already getting the... As nice as it would be to have a clone to do more. Although whenever I think of clones, I think that old '90s movie, "Multiplicity", with Michael Keaton, where he keeps making clones of himself, but the clones are not quite as sharp as the original. And then one of the clones clones themselves and copy of a copy's never quite as good as original. So, he ends up kind of being a dunce, and I can't think cloning and not see the downward spiral of that wonderfully adorable '90s rom-com movie.
Carl: So good. So good.
Defining What It Means To Be A Lead Advisor [01:16]
Michael: So, for today's discussion, I wanted to actually talk about something I feel is both really, really simple and then actually really quite nuanced. So, we had this great question that came in that just asked, what does it actually mean to be a lead advisor? I mean, we use these kind of labels of the industry of there's associate advisors, lead advisors. Some people say service advisors, some people say senior advisor's maybe a tier above that. So, there's some language around that that we may have to clarify as well. But I mean, the essence of it, right? Most firms have some distinction of there's the associate kind of advisor who's come in and the lead advisor, which usually means something to the effect of has clients of their own. So, I just was really intrigued by this to think about from a perspective like, when I say, Carl, I'm an associate advisor and I want to move up to be a lead advisor, what does that mean? What do I need to do, learn to be able to sit in that seat that I don't necessarily know when I'm just getting started in my advisor career?
Carl: Yeah. Look, I think I'm super curious to hear how you answer the what do I need to do part, but the, what does it mean? It's interesting. Just, I was trying to feel into that question when you said, "Carl, what does it mean?" And I felt my shoulders get a little bit of tension between. And my first question was, are you sure? Right? Do you really want that? And the reason I'm thinking about that is because I just had this great conversation with a planner who just graduated from UVU, Utah Valley University, which is the largest financial planning program in the country as I understand it. He is incredibly well-respected by his peers. He won a big award that he got last week, has his CFP, graduating from college with his CFP.
And I asked him what he wanted to do and he said, "I just got a job at a big-name place that you would all recognize." And it's great place to go work right out of school. Lots of the youngs do it. And he's like, "And I'm really excited just to see how I like it there. Because I could see myself making a career out of it." And I was a little struck almost like, "Well, you don't want to start..." I asked him, "You don't want to start your own thing?" He's like, "No, I just had my first child. I've been really dedicated to school. I'm kind of excited to be someplace where I go and I work and I have good benefits, and I go home." And I was like, oh my gosh, that's really refreshing to hear somebody be like, I'm okay with this. And he's like, "And I could see myself making my whole career there." Really fascinating. So that...
Michael: I don't think that necessarily moves away from the lead advisor question. I actually read this as I'm an employee, I get a salary.
Michael: I would like a higher salary with a more senior employee job at that firm.
Carl: Right. It may not be the entrepreneurship piece, but it definitely is the…
Michael: The whole other discussion.
Carl: Yeah, let's separate that out. There are people who will be happy as paraplanners for their whole career.
Michael: Oh yes.
Carl: Right? And I think we need to celebrate that and be like, that's okay. It doesn't make you bad. And one of the variables, I think that happens with lead advisor, and it's also okay to want to be a lead advisor. Totally okay. Exciting, right? One of the first things I think of is responsibility. The first thing I think of is weight. The first thing I think of is, if you do your job right in at least my version of this job, is you're aware of, I often say it, I don't quite mean it this way, quite, but somebody's cried in your office. You know what the money's for, you've heard the stories about first-generation to college.
Michael: I just like that there's this implied rite of passage now. You know you're a lead advisor when the client cried at your office.
Carl: What does it mean to be a lead advisor? You've got tissues in your office and paraplanners don't. That's not it at all, but all I'm saying is that's what comes to my mind is, hey, I've got a little bit more responsibility. I'm more involved. I may feel, even though you can do this job 100% right and have people not meet goals and it not be anybody's fault, but you feel it a little more, right? You feel it a little bit more as a lead advisor on top of the other skill sets. That's the soft side skillset, which I happen to be a big fan of. So, that's the first thing that comes to mind. What comes to mind for you?
Michael: So first, I feel we do have to I guess kind of set a little bit of the language or the nomenclature at least as I think about this because otherwise, we get crossed up on what the terms of the words mean. So, at a high level, I tend to think about this at 3 core roles of what tend to emerge in advisory firms. The first is an associate advisor. As an associate advisor, your primary role is just making sure the financial planning stuff is getting done. You're supporting this some advisor who's actually responsible for the client relationship, but you are not responsible for the client relationship. If the client decides to leave, you do not have repercussions for this, assuming you just didn't do something horrible to cause it. Your job is make the plans, support the advice giver, support on the follow-up. You might have some light client interaction with this, but at the end of the day, you are not responsible for the client relationship. As a lead advisor, you are.
To me, the whole crux of being a lead advisor means if that client stays or goes, it's on you. Down the point of, if too many of them decide they don't want to stay, your income's going down or your job's in jeopardy. Per your discussion about weight of responsibility, that's what it means to be in that seat. And different firms use different labels. Some will call this lead advisor, some will call this service advisor. The reason why I think that distinction is meaningful is there is a next tier up from that that I would separate, which some firms will call senior advisor, some frankly just call partner, where you're expected to bring business in, where you're expected to do business development.
And at least if we're going to sort of talk about an employee model, because obviously if you're hanging your own shingle and you're running your own business, all this is different. But when I think about it from an employee model perspective, that's kind of 3 tiers. Make sure the planning analyses and stuff is getting done and support the advice process. Actually be responsible for whether the clients at the firm remain clients to the firm. And then go get new clients to the firm. Because there are a lot of advisors out there wonderful with relationships and managing clients, cannot necessarily go get new ones. That's not their skillset. They're fantastic at servicing the ones that they've got. So, I do think it's important to separate out business development roles. We'll call that a senior advisor versus a lead advisor or service advisor, where my role is just here are the clients. Make them stay.
Give them the advice and the service. Not just forcibly make them stay, but give them the advice and the service. You are the one that's responsible for earning their business and making sure they stick around. And the key distinction to it, I think relative to, to me, what it really means to move up from an associate advisor to a lead advisor, it's not just about whether you can communicate with clients and be relationship-y while you give advice. To me, the crux of what it means when you're a lead advisor is that you actually manage the relationship. You actually manage the client's interaction with the firm, which means I'm not just available to answer their advice questions and provide good service. That means, oh, the client who's making unreasonable requests to the firm and keeps asking for one-offs, to be able to have the conversation with them I need you to understand how we operate here at the firm. What you're asking for is not a service that we're able to provide.
And you have to have that conversation the way that hopefully they still actually stick around, or "I don't appreciate how you're speaking to our team members. We're going to have to ask you to stop being a client if you can't treat our staff appropriately." Having those types of conversations. Just managing actual expectations of the client like, yeah, we were up, whatever. We were up 17% last year. Not actually, example only. We were up 17% last year. But that's not actually a realistic expectation. We will not do that every year. In fact, we'll have a year where we could be down 15% or 20% in bear market.
Let's actually pull out your statement, pretend that we're down 20%. Tell me how that feels. Let's talk about that. Because I'm trying to manage your expectations down and prepare you for what happens in the inevitable bear markets that when the actual bear market comes, you don't freak out and blow up on me. So well, what it means to actually manage the relationship I think is a really powerful thing. And it's more than just saying I give good advice and I establish good relationships, so, therefore, I should be so icy and likable that they'll just stay with me.
How To Gain The Skills And Confidence To Become A Lead Advisor [12:08]
Carl: How does one go about doing that? To this advisor's question, I'm an associate advisor, I want to become a lead advisor. What do you do in the context of a firm that operates the way you just described?
Michael: Practically speaking, I will admit, I actually don't think there's a lot of good training out there on this. The best I've seen by far is Philip Palaveev has a book called "G2," for G2 advisors. He's also got a whole G2 leadership institute thing, but he's got a book, I think it's "G2: The Next Generation." And it has some really good discussion about managing client relationships, what it really means to start crafting and learning that skill. From a slightly more practical perspective, there are only 2 ways that I've seen advisors in practice learn this. You do it and you learn by school of hard knocks. The firm gives you some opportunities. And I think in practice, that's why a lot of firms, so you can start having some of the smaller client relationships because frankly, you have to learn this. Not a lot of people do it naturally. You can learn by the school of hard knocks, but if you're going to learn by the school of hard knocks and lose some clients along the way while you learn the lesson, I'm going to manage the stakes by having you learn with clients that do not cost quite as much revenue when this doesn't go well for you. So, you learn by doing, ideally with someone that can give you some mentoring or feedback, if you can find someone in the firm that helps you do that.
The second way that I think you learn this is by just sitting in the meeting with other advisors who do it well, and just seeing and observing. And if you sit in enough meetings with advisors, you do see different ways that it gets handled. And frankly, you'll see it with some advisors that do it well and some advisors that do it not well. Both are learning opportunities. You know, if you get to see an advisor that does this and then the client fires them anyways, well, I kind of just saw how to not handle that situation. I'll mentally notch that for myself. But I'll admit, I don't know any structure or trainings that I've really seen on just the sort of that truest sense of how to really manage a client relationship, right? We're starting to see some stuff built around, what does it mean to deliver advice? How do we deliver advice better and show up for meetings? But that actual element of, how do you see what meetings look like? How do you learn that behavior? I think most commonly you learn it from a school of hard knocks or you learn it because it's modeled to you because you sit in on client meetings and you get to see it.
Carl: Yeah. Tell me if you feel differently about it, but it feels to me like I'm always... How do you think people should manage the tension between feeling inadequate and sort of not ready for it, and wanting to do it? That's one set of tension, but combined with this tension of, I'd really like to do that and I'm not sure that lobbying for it is a good idea. Because my first instinct was, well, I think you just have a conversation with the person that is your "boss." And you say, "I'd like to do more of this. I want you to know my goal is to do this, and I'd like to be helpful however I can. Can I start sitting in on more meetings? Are there some clients that maybe we're thinking about are at the lower end of our service model that I could be helpful on? How could I be helpful here and also have this experience?" How do you manage that tension of being maybe a little worried about imposter syndrome, little bit, but also a little worried about, am I stepping on somebody's toes by saying, "Hey, I'd to do more of this?" Because my experience is you're not stepping on toes. If you're in the right place, people would be excited to know that, but often they don't.
Michael: Yes. So, well, look, on the first part around the imposter syndrome dynamics, I call back some of our prior episodes. I, unfortunately, don't have the episode number handy, but we've had this conversation of when there's a thing you're not certain about and you're feeling some of the imposter syndrome, do you have to go learn it to build the confidence to do it or do you just start doing it and as you do it, you'll build the confidence by getting the experience and getting the reps in, right? I know you're a much more, you just get in there and start doing it and that's what builds your confidence skillset for you. I'm very much the other end, where I had to get the alphabet soup first before I felt I had enough confidence to show up in a client meeting and not feel like an imposter.
Ironically, I think if the leaning is more in your direction, they're probably just shooting off trying to do it already. So, I'm going to guess that's probably not the listener who's struggling with this. I'm going to guess they're a little bit more on my end of I'm trying to figure out what I do to invest myself and move up. So, I guess one thing I will just say is, get Philip Palaveev's book, or just get the "G2" book. I'll also give a shout out for Hannah Moore's externship.
Carl: So good. Yeah.
How To Gain Client Management Experience And Communicate Career Growth Goals [17:49]
Michael: Like internship, but externship. It's essentially a multi-week virtual course program where you just get to see a whole bunch of advisors delivering various parts of their financial planning meetings is you get to see a whole bunch of advisors delivering various parts of their financial planning meetings, right? Because the extent that you got to see it to learn it and observe it, the more seeing time you get, the more that helps. If the dynamic ultimately is just I need to see it more and more, I need to get more at-bats, which means, how do I do this within my firm? I mean I think, Carl, you went to the 2 places that I would be going, right? The first is asking, can I sit in on some client meetings? And as you've noted, if you want in and I mean this is a good exercise in and of itself about what it means to manage relationships, manage expectations, and make this work, I'd like to sit in on the client meetings because I'm trying to move up. That's all about you.
Could I sit in on client meetings and help capture the notes? Because I've noticed you don't love entering them in a red tail afterwards. If I could come to your meetings, I'll capture all of that for you, plug it in the CRM and I'll even prep a follow-up email for you so that you can go and fire that off and it'll make your life easier. Well, okay, now as a senior advisor, that feels a little bit easier to say yes to because you're not asking for you, you're asking for me. I mean, you're asking for me because you want something out of it, that's fine. But again, if you want to manage up to get the opportunities, you have to actually manage up, which means finding what's in it for them, not just what's in it for you, and making your case in a way that's compelling to them. Because frankly, if you could practice that skillset with your boss, it'll be very helpful when you need to do it with clients as well or bring clients on board or get clients to stay on board.
So, getting into client meetings, even if I'm just going to be silent note taker is a great start, but if I got to sell my boss on that, can I take your notes for you? Can I prep the follow-up emails for you? Can I plug all this into red tail for you and kick off the workflows? Can I do this for you so your life gets easier? Because now you want me in the meeting because I'm making your life easier. And now I get to see and I get to hear, and I start getting my reps in. And if I can't do it for you, can I do it for Bob, the other senior advisor? Because you're actually really good at the notes, but we all know Bob is not good at getting...
Carl: Bob's terrible at this.
Michael: ...Bob, you got Bob. Sorry to any Bobs out there. Bob, we all know needs some help in managing the tech stuff. So, can I go sit in on some of Bob's meetings and help? And likewise, I think the extension for that, if you're a little more in the Carl direction of, I just want to get in there and start doing it, I think it's asking in the same vein like, look, I know you're getting some more big clients in, but you've got a lot of the smaller ones that you still have to meet with. What would it look like if I sat in on the meeting with Harry and Betty next week and try to support on some of it. If it goes well, then I'll take the meeting next time they come in and you don't have to meet with them anymore, and I'll be responsible for it.
Michael: Right? If you're plugged into an advisor or a team, you know who the clients are that are probably not the best fit for whoever the lead is at the top of the team, where it might be a little bit of a relief if you would just take some of them over.
Carl: Yeah. Yeah, I think that's super good. And it can even go so far as, "Hey, in order for the firm to grow, you've told me a bit about the goals that you have for the firm, in order for this to happen, the best thing we could possibly do is have you moving upstream a bit. And I'm happy to help by taking care of clients that maybe I could handle and would be serviced well by me." So, it's in service of, and I don't even think that's tricky. That's just literally in service of the overall goals of the business of which you are part of.
To me, that's always, it should be the default setting of, how can I... It's not about me. Of course, yes, I'd like to learn to do this thing. Are there things that would be beneficial to me that would be helpful to the business, helpful to you? How can I serve, how can I be helpful? It feels to me like there's got to be opportunity. I mean, I just know I would love somebody to come along and say, "Hey, can I do the thing that you're doing right now that doesn't serve the business well?" So, what else? Is there anything else? because I think you're right, Hannah's program, the books you mentioned, and then to me, it's just dive in and get after it.
Michael: Yeah. I mean, there are a couple of other X factors I think that come with this. The biggest is some advisors are going to hear this and go to their boss and ask this and the boss is going to say, no.
Carl: Yes, that's true. Bob.
Michael: Bob. All right, Bob needs the help. Bob's going to be fine. But someone else who shall remain nameless might say no. And so, I think it's worth reflecting on why might you get nos on this? Because I think there's a couple of common reasons that likely crop up. The first just realistically, this whole idea that you're the advisor who's going to move up and become a lead and take on more client relationships, that's only valuable to the business if the business is growing. And there are a lot of advisory firms that just aren't growing. Maybe that's because the senior advisor who's in charge is actually really isn't sure how to grow it or has gotten to the point where they don't know how to grow it any further and the business is kind of stagnating. Sometimes it's the reality is you might be an associate advisor who joined a firm with a really successful advisor who built the practice and got it to a certain level, and the reality is they are really happy with the money they make and the amount of hours they work, and growing is just not their priority. The hours they work and the money they make, why do you need to grow more at that point?
But the key distinction, if the business is not growing, there is nowhere for you to move up. The only way that you move up and get paid more is that they have to make less, and if they have to make less to pay you more, that's not going to work well. Growing businesses, this works because the business gets bigger, which means the business gets bigger, I can make more, and you can make more at the same time. So, we're all winning. So, let's go on this growth journey. But advisory firms that aren't growing, a lot of advisors start to struggle with this, or they get told, well, if you bring in your own clients, you can have them, but I'm not giving you any clients because of what it comes down to is if my pie's not growing, I can't make your share of it grow either.
And ultimately, that's an issue of the firm that you've chosen to be at. And just the reality like, if you are on a growth path and they're not, at some point, you're going to have to part ways. Nothing negative to the advisors that don't want to grow. I tell the same thing to advisors that have built firms and grown to that point where they're happy and they're comfortable and not really growing anymore. That's totally cool. Work your hours, make your money, do the thing that's happy for you. But if you get a young, growthy aspirational person, you better recognize that they are going to outgrow your job. And if you tell them the only way to grow is to bring on their own clients, they're also going to outgrow the job because they're like, if I bring in my own clients, I can hang my own shingle. I don't need a job from you to get my own clients. I'll do that myself at that point.
So, firms that aren't growing, I find often this becomes a challenge at some point. Because the firm owner doesn't want to transition clients because it only takes money out of their pocket if the firm isn't growing in the aggregate. So that's more of a choice of environments than really a conversation thing per se. If the firm's not growing, the firm owner doesn't want to grow because they're happy with their hours and their time, the only way that situation changes is if you change it. They're not likely changing it at that point because they've built the thing they're happy with.
Carl: Yeah, I agree. I've heard that a lot. And in fairness, there are plenty of firm owners that think they want to do that thing and then things change, and I've heard that a lot. Like, "Hey, I joined this firm because I thought there was going to be an opportunity to grow into a lead advisor, get management on clients," and now it's time and the owner has changed their mind and that results in tension, and I think in fairness, things change and we learn and we grow, and what we thought... The idea of growing a firm is often much cooler than the actually growing a firm.
Carl: So, we get enamored with, yeah, I'm going to bring people on. And so yeah, you just be patient and gracious, and if it's clear it's not going to work, then you get along, little doggy. Time to kind of go do something else.
How To Discuss Adjusting Compensation Related To Increased Responsibilities [27:23]
Michael: Yeah. I think the second piece of this, which sort of sometimes ties the first is just the money, right? Well, it's one thing if you're sitting on client meetings. If I start taking over some clients of the firm, does my comp change? And realistically, I would say that's going to vary by the firm. If the firm has a track for this, they likely already have some comp structure that says, when you have this much clients or revenue, you get paid this. Maybe it's a percentage of, maybe it's salary tiers, but most firms that have built some track where you're just trying to move up through the track have this defined. If you're at a smaller firm, they may not have this defined yet. The truth is they may have no idea how they're going to compensate you if you start taking over clients.
And the irony is that if you push it too hard, they may actually say no. Not because they're opposed to you taking on clients, but because they just weren't ready to figure out the answer to that question yet. And if you have to push them on it, then the answer is no because they don't want to make a decision that they're going to regret later.
I gave you a rev share thing and now I want to take it back in 2 years because I didn't structure it the right way because I've never added an associate advisor to do that before. So frankly, what I would encourage for advisors that are looking in that direction, if the reality is you're trying to build your skillset to get to the lead advisor role, I would not be as focused on the first... By the way, and the first time you give me a client, I get paid more, right?
Michael: Don't start there, start with I'm going to build experience and I'm going to build my chops. Yes, if the firm's got a comp structure to do it, by all means, go for it and take advantage. But if it's not there yet, again in the domain of how do you manage relationships, I will be going to the firm and saying, I'd love an opportunity to start taking over a couple of clients that I know you guys don't really want to be meeting with and spending time with anyways. Could I sit in on the meeting next week and then start working with those clients, or that one that's coming in that we all know you don't actually want to be in the meetings for? Right now I'm happy just to have the opportunities to support the clients of the firm, but if this goes well, I hope at the end of the year we can revisit this to make it part of my compensation.
So, you can set the expectation, y'all don't have to figure this out now, because then if they haven't figured it out, they're going to say no because they just don't have the time to figure it out right now. But in the spirit of managing expectations, because that's what managing relationships is ultimately about, the managing part. Setting the expectation like, I just want the reps right now. But if it goes well and I'm handling these clients well, I am expecting that we're going to revisit compensation then.
And if the reality is you're thinking, well, if I have that conversation, I'm pretty sure they're going to gyp me at the end of the year and not do it, then the reality is you just need to not be at that firm. Because I've had that conversation with a few advisors. If I do that, I know what's going to happen at the end of the year, they're just going to gyp me and not do anything. It's like, cool. Then I would still do it and get the experience in, and then recognize that you're probably not in a good... If the trust is that bad and you can't repair it, that's probably not a good long-term career place for you. So, get your experience in and use that to find a new firm where you can put on your resume "was primarily responsible for a client."
Carl: Yeah. No, that's super good. That's got to be the most helpful how to become a lead advisor instructional manual ever written right there. Right there.
Michael: All right. Well, I hope it helps a little. And if they just keep saying no beyond that, then just ask them, what do you need to see me do or show you to get comfortable with either me being in the meeting or me taking on some of our smallest client relationships, and just ask them, "What do you need to see me do?"
Carl: And I'll show you.
Michael: And let them tell you what the blocking point is.
Carl: Totally. Love that, Michael. Thanks.
Michael: Awesome. Thank you, Carl. Appreciate it.
Carl: Hey, cheers.