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Human Capital

(Originally written for Forum Magazine)

A financial advisory practice is equal to the sum of its people, plain and simple. Yet, despite the importance of support and professional staff, many principals only pay lip service to recruitment, training and retention. As KIMPOULIN explains, a proper employee development plan can spell the difference between prosperity and plateau.

Imagine you had a client and did no follow up. After

performing an initial assessment and putting in place a financial plan, you didn’t monitor how his investments performed. You didn’t schedule subsequent meetings to keep him updated and learn about his changing needs. What would happen? You would soon lose that client—and likely your business as well.

If you wouldn’t treat a client like that, why do financial advisors often forget to look after their investment in human capital? Many we see in our practice do not adequately nourish the staff they have so carefully hired, providing proper feedback and direction. The need to learn how to properly manage staff is underlined by the recently released Moss Adams Report (Financial Performance Study of Advisory Firms). Among its key findings:

“To service larger numbers of clients in a more demanding environment, practices have added more people ... Clients are demanding increasingly sophisticated services or, in many cases, advisors are offering them to stand apart from competitors. To deliver at this level, firms require more specialized professionals and more elaborate resources to support them.”

The report also cites statistics on why employees leave a firm. The most common reason is incompatibility with the company’s culture (insufficient compensation is far down the list). In other words, not enough is done to ensure that employees fit properly into their jobs. As made clear in our previous article on hiring, having the right support staff and resources in place enables advisors do what they do best: spend more productive face-to-face time with clients. To train and retain motivated staff requires a sound integration plan— one in which you spell out your expectations, provide the right training and tools to do the job and give continuous feedback.


Although it may seem unnecessary, we suggest you start by putting all your relevant office policies down in a document for staff. If you don’t have this in place already, you can help create buy-in by getting input on office policies from your existing staff. The document could cover everything from working hours and overtime to holidays and bonuses, to the appropriate use of Internet and technology in the office. The list could be as long or short as you deem appropriate and could serve as a concrete aid. If, for example, you are dealing with an employee dressed inappropriately at work, you can refer to the dress code. Clearly spelled out policies remove ambiguity, letting employees know what to expect and how to comport themselves in the workplace.


The next step in integrating a new employee is to make sure that they have the proper training and knowledge to perform their job. The advisor or team leader should start with a “gap analysis,” assessing the divide between the new employee’s skill set and the job description. If, for example, part of the job is to create presentations, the employee may need to take a PowerPoint course.

To close the gap, in an ideal world, there would be some overlap between your new employee and the old one

who could provide training on the job. Barring this, there are other training resources you can use.


One of the best ways for an employee to learn their job is to refer to a written procedures manual. If you don’t have one in place, then consider having the new person build a procedures manual as they learn their new job. They will gain a thorough understanding of their duties as well as create a resource for future staff. Suppliers can also be an important resource for new employees. You can furnish new staff with a list of supplier and distributor contacts who have given permission to get in touch with any questions. Other types of training support are also available.

For example, most software providers have phone or video training modules to help new employees get up to speed. Another possibility is to find a mentor. If you know another advisor who has someone experienced in the same position, dealing with the same distributors, perhaps he or she could be a model that your employee shadows, picking up expertise. If your new hire has to get a licence for mutual funds or insurance, don’t hesitate to turn to a third-party support organization such as Foran, which runs classes for this.


Along with the right training, it is essential to supply your employees with the best tools to perform their jobs. One example is your contact management system (CMS). Most CMS software allows you to segment your clients and keep their information current. It should also permit you to schedule follow ups, provide reminders of client birthdays and other special occasions, track commissions and provide all pertinent data about a client in a single field for fast, easy access. Besides software, it is important to remember the employee’s working environment. Considerations such as ensuring your employees’ computer equipment is fast enough for their software and their workstations are ergonomically designed can help them perform at their best. Remember, the better equipped your staff is and the better they understand your business, the more they will be able to contribute to your enterprise by identifying sales opportunities, preparing client files for your meetings, leveraging software and taking care

of other matters backstage while you are out front with clients.


One effective method to chart and guide a new employee’s growth is to put in place a development plan. The plan would assess the person’s short- and long-term work goals, including optimum performance in their current role, alternate role interests and career growth. Then it would cover their strategy for achieving these goals and what action plans to implement. Overall, the development plan will help you to understand your employee’s career ambitions and help them to direct their efforts to achieve them. Renée Moirier, from Marcolin &Associates in Montreal, finds the direction and focus created by this kind of plan, done in conjunction with ongoing coaching, very “valuable ... providing me with clarity as to the path that I must take to get to the next level of my career. More specifically, when I feel that I encounter blockages, the direction I have received has helped to clarify the paths available for me to get to the other side.” And in an era where work-life balance is often as important

as career advancement, a development plan can also cover personal goals. So, if a person has stated an objective of becoming healthier, then you might consider helping them achieve this perhaps by splitting the cost of a health club membership with them as part of their compensation arrangement and review.


One of the best ways to keep employees on track, to measure performance against set priorities and to make sure everyone is responding properly to a constantly changing business environment is the annual staff review. Most advisors we know try to avoid giving feedback and are made nervous by the thought of conducting a face-to-face performance review. But this does not have to be an onerous, confrontational affair. It should be a constructive session providing guidance on improving performance, leading to greater employee job satisfaction. In fact, there should be no surprises if meetings and feedback have been constant throughout the year. “With the old way of doing performance reviews,” says a manager at one large Toronto financial firm, “you would have someone in your office saying, ‘What do you mean I haven’t done what you expect of me?’ (But) by meeting with staff regularly, I can keep

on top of every situation as it happens and correct problems. So performance review is about constant feedback, learning and improvement. It’s about giving people an opportunity to improve rather than telling them they are underperforming.” In providing any type of feedback to staff, how something is said is as important as the information conveyed. Responses to mistakes should be done in a constructive, not destructive way. The feedback should also be given in a timely fashion, before the annual review, so that appropriate corrections can be made throughout the year. As a rule, for every criticism a new employee receives, he or she should get two or three positive instances of feedback. Do not ignore mistakes or they will keep occurring, but treat them as a learning experience, balanced with praise for things done well.


While leading your team is important no matter what size a firm, it becomes essential when revenues top $1 million. Typically, an advisor at this level might have two or three support staff, which may include a junior financial planner, administrative assistant and marketing assistant. As the Moss Adams Report points out: “To grow assets, clients and revenues, firms need to leverage their senior professionals with increasingly larger number of junior professionals and administrative staff.” In this scenario, management duties could threaten to reduce your revenue-producing time with clients. It may make sense to hire a team leader who would act as a buffer between you and staff, who would take care of staff reviews, set office policies and so on, allowing you to concentrate on what you do best. The team leader, under your direction, would also shape the dynamic of the team, so its members learn to work effectively. They would guide the team through the four stages of development, as defined by Bruce Wayne Tuckman in 1965:

  • forming (getting to know one another, setting clear objectives and goals);

  • storming (overcoming conflicts as people settle into their new roles);

  • norming (where a real team starts to form and productivity increases); and

  • performing (team loyalty and performance finally run at their highest).

When you have team members who show particular promise, you may want to invest in some expert third-party coaching. They can benefit from this kind of one-on-one direction, just as advisors can do, helping them to learn new skills, sharpen their focus and generally perform their jobs more effectively. It could be the nudge they need to get to the next level. As Justin McHugh, of the McHugh Group in Montreal, says: “The coaching I have received has allowed me to be that much more ‘on’ when I need to be. I am more accountable and I feel more integrated on the team.”


To get to the top level of performance, clear, effective communication is required. To keep a new employee on track, we suggest the advisor or team leader communicate daily (15minutes) for the first three months, covering what was accomplished the day before and what is planned for that day. It’s a good idea to always set the meeting for the same time, so there are no unnecessary interruptions. Longer weekly meetings (30 to 45 minutes) are also useful for discussing issues and questions in more depth, reviewing the past week and looking to the one ahead.

As part of your communication process, consider having your employee sit in on some client meetings. He or she can see how you operate and provide value to clients. If you have a specific process that you take a new client through, your employee would learn a lot by sitting through this from beginning to end. The more they understand

how you operate, the more effectively they can support you. As well, the best teams hold special meetings attended by all once a year. This is where you can share your vision for the company, leverage the creativity and perspective of all members to help identify and set goals and discuss pertinent business issues.


At the end of the day, you want to reduce your employees’ reliance on you, creating independent workers who perform dynamically, with a winning attitude. Thus empowered, they will actively participate in the growth of the firm, providing perspectives and input that will lead to successful solutions and help the company move

in new directions. Engaged, highly motivated employees not only do a better job, they are more likely to stay around for the long haul, improving staff retention. Froman employer’s point of view, whether you are a large or small firm, protecting your most important investment will pay big dividends. By delegating activities and duties that do not directly generate income, you can manage your time more productively. But the proof is in the numbers. Statistics show that if you can double or triple your face time with clients, your income will go up proportionately. And that’s a good thing, isn’t it?


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