Set expectations, understand it takes time and be prepared for anything.
The process of integrating a next-gen advisor into a practice is challenging and time consuming yet completely necessary for any advisor who wants to avoid hitting the proverbial capacity ceiling and wants an in-house succession plan. Advisors should expect to spend at least the first year just getting the new advisor acclimated to the practice and the role; helping them with their language and approach, teaching them about the clients you serve, and ultimately helping them co-create and execute a plan for what success looks like in their role.
Here, I explore the most common mistakes I have seen advisors make when onboarding and developing young advisors and provide examples for how to avoid them.
Looking for the Unicorn
Every advisor wants to hire a young worker who can come into the practice and quickly generate revenue for the practice, either by cultivating opportunities in the book of business or by finding new clients. This type of hire is extremely rare, not just because it takes a certain amount of skill, experience and talent to be a producer, but because many young advisors entering the business today want to advise without the responsibility of growing the business.
Advisors need to reset their own expectations about the role they are looking to fill. Rather than looking for another “producer,” advisors should look to bring in someone who can slowly and sustainably create capacity for them over time, first by taking over meeting prep and follow up, and eventually by delivering advice and handling client relationships.
It is much easier (and arguably more important) to train someone to preserve current revenue for you, so you can grow the business, than it is to train someone to create new revenue.
Not Setting Proper Expectations
Before a new advisor starts at your firm, it’s important they understand how to measure success within their role. Within the first month, they should be able to answer the following questions:
How will I know I have successfully integrated into the practice?
- An example might include “being able to clearly articulate the firm's value proposition” or “being able to put together a review meeting agenda for a top client meeting.”
What should I be aiming to achieve on an ongoing basis in my role?
- An example might be “creating capacity for the senior advisor by handling all review prep and follow up” or “building rapport with current clients by texting, emailing or calling all A+ clients once a month to check in.”
How will I know if I have had a successful week?
- An example might be "clients are proactively reaching out to me instead of the senior advisor.”
How will I know if I am progressing in my role?
- An example might be “being able to handle client service requests without intervention from the senior advisor.”
Expectation-setting doesn’t end at onboarding, however. As the next-gen advisor develops, it will be critical to set expectations about how you are handing off work and relationships to them: what language you will use to introduce them to clients, how you will make the hand-off for certain tasks, etc.
Clear expectations help foster a culture of total transparency and mutual accountability between you, the new hire and the entire team.
Underestimating How Long and How Much it Takes
How long does it take to develop a next gen advisor into a self-sufficient advisor who can manage lower tier relationships without your support? The honest answer is it depends, but you must be willing to play the long (years) game and you must be willing to train them.
Assuming you have the right person in the role, there are certain things you can do to speed up the development process.
The first is introducing a three-phase approach to training:
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- Phase 1: Shadowing lead advisors in as many meetings and conversations as possible. You should be debriefing after each conversation and asking the new hire questions about what they learned and observed.
- Phase 2: Practicing skills in a controlled environment. An example of this might be forwarding them a client email and coaching them on how to respond. Stay in the background while providing feedback and positive reinforcement along the way.
- Phase 3: Leading initiatives. Eventually, the new hire will be ready to work with a lower tier household on their own, or even handle a new prospect discussion.
The time it takes to move through each phase is less important than knowing when to know its right to graduate to the next phase. Co-create the key metrics for each phase with the new hire. These may include things like:
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- Provided great ideas for how they would’ve added value in a meeting they shadowed.
- Asked pointed questions and as able to pivot during the meeting rather than just “sticking to the agenda.”
- Clients are comfortable asking the hire a question directly.
If you are comfortable with the key metrics and have proper expectations about what development should look like, you will find yourself more quickly able to identify whether a new hire is or is not developing.
Ignoring Generational Differences
There are very specific differences between baby boomer advisors and Gen Y and Z advisors. While there are exceptions, especially with first-generation millennials and Gen Z, the younger generations have grown up in a participation-trophy, positive reinforcement-oriented society. Their confidence has been built on the number of “likes” they get on social media. They’ve grown accustomed to getting recognized for showing up, but not necessarily for outperforming. They want to have an impact on the world and want to feel like they are part of something bigger than themselves. All of this must be considered when leading next-gen hires. Always aim to:
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- Provide positive reinforcement instead of negative reinforcement.
- Foster a culture of collaboration and teamwork.
- Constantly remind the team of the greater mission and vision.
On a final note, its important to always “expect the unexpected.” There are many advisors who have successfully developed their successor, only to realize that he or she doesn’t actually want to be a successor. I am finding this trend is growing more and more common in our industry. The young advisor, now a Gen Xer, loves their job and loves advising, but doesn’t have the desire or risk-appetite to buy-out the senior advisor and “take over the business.”
Meet quarterly with your younger advisors—and everyone on your team—and stay in tune with what they want personally and professionally, so there are no surprises for you, or for them in the end.
