In the not-so-distant past, the typical career path toward becoming a financial advisor was to build up a book of business on one’s own, often by either tapping into one’s own personal networks or cold-calling prospective clients in bulk to generate enough business to gain a foothold. But the obvious flaw with this ‘eat-what-you-kill’ model was that newer advisors overwhelmingly succeeded or failed – not by virtue of the quality of advice they gave to their clients, but by how effectively they could sell the financial products for which they were usually compensated via commission.
In more recent years, however, the rise of the fiduciary advice model (in which the quality of advice provided to the client really does matter to the firm’s success) has allowed a new career path to emerge: that of the associate advisor, who generally takes on financial planning tasks, like data gathering and analysis, to support the lead advisor so that they can focus more on managing the client relationship and bringing in new business. And as the associate gains experience and trust among existing clients, they can gradually take over some of the lead roles themselves, to be supported by new associate advisors of their own – thus allowing the firm to transition its clients from the founder to the next generation of advisors.
But for many experienced advisors (and particularly those whose careers evolved through the older eat-what-you-kill model), integrating an associate advisor into an existing practice can come with its own challenges. For example, seeing eye-to-eye on the expected responsibilities of the associate advisor’s role, as well as the role’s future possibilities and its meaning to the associate advisor’s career trajectory, may not come naturally, especially when the senior and associate advisor are each from distinctly different generations – which can result in dissatisfaction from both parties if they aren’t both clear and in agreement on the role’s purpose and where it is headed.
In this guest post, Penny Phillips, president and co-founder of Journey Strategic Wealth, uses her expertise in helping advisors address some of the common challenges in introducing new associate advisors into their firms and how senior advisors can scale their time and productivity to successfully integrate associate advisors into their advisory practices.
One of the most important components of bringing on an associate advisor is being clear about the purpose and requirements of the role during the hiring phase. And because associate advisors are often hired in the early stages of their careers, it should also be clear how they will be taught and supported by the firm to succeed in the role. This can be achieved by establishing a framework of Objectives central to the associate advisor role, as well as clearly identifiable Key Results that will help team members recognize whether they are achieving the desired results.
Furthermore, this Objectives and Key Results (OKRs) framework can also be extended to the associate advisor’s career development to define and work toward key skills that bring them closer to what they want to achieve. And as the senior advisor’s own role evolves with the addition of an associate, they may want to develop their own set of OKRs to ensure they are progressing towards their goals for themselves and their practice!
Ultimately, the key point is that finding and developing an associate advisor will take time and effort – for both the senior advisor and the associate advisor. However, a successful partnership between senior and associate advisors has the potential to last many years and can allow the practice to scale up in ways that aren’t possible for a solo advisor. Taking care to start the process on the right foot can therefore pay dividends for both parties in the long term!