Hiring Today Is Tough. Here's How to Get It Right.

Angie Herbers, advisory firm consultant and columnist

What You Need to Know

Advisor turnover gives firms the chance to hire replacements with better, and clearer, expectations.
Be patient, know exactly what role you’re hiring for and stick to your intended hiring strategy.
To better retain talent, be upfront about the number of clients your advisors or teams are expected to service.

My consulting firm learns a lot about what’s going on in the industry through prospective clients that reach out to us. Firms often come to us because they’re grappling with problems and challenges that, in some cases, turn out to be prevalent throughout the advisory landscape. 

Right now, we’re learning that advisor turnover is picking up steam, well after the COVID-19 heyday of what was called the Great Resignation. What’s happening in financial advisory firms indicates something like a delayed Great Resignation.

Even as wages continue to fluctuate throughout the industry, advisory firms in particular those that didn’t focus on improving their cultures during the COVID pandemic and/or are regressing to pre-2020 cultures are losing advisors. While losing advisors is tough, it’s also an opportunity to replace those vacant positions with roles for which your firm has better and clearer expectations.

As a result, now is a great time for advisory firms to enhance their hiring processes. While there’s no one-size-fits-all hiring method, there are several areas where advisory firms continually make mistakes. 

Here are five areas to watch out for when hiring your next batch of advisors. 

1. Know the job you’re hiring for and stick to it.

It’s not uncommon for a firm to post a job description for, say, a lead advisor — an individual who can work with clients without supervision — and hear back from non-matching, but nonetheless interesting, candidates. 

These respondents might not exactly be lead advisor material, but they might be more suited for business development, for example, or closer in skill level to an associate advisor who aspires to work with clients on their own someday. 

When days and weeks go by without a candidate stepping forward who fits the original job description, some firms often effectively change the position they’re hiring for to accommodate an intriguing candidate’s skills. This isn’t always the best idea. 

First, it’s a sort of bait and switch. When a candidate thinks they are applying for one position and midway through the hiring process you present them with a different position, it can lead to mismatched expectations. 

For example, if an associate advisor applies for what they believe is a lead advisor position, only to find their role is just supporting another advisor, you’ll have an unhappy employee on your hands. 

What’s more, the peripheral hire will take more of your budget than you originally planned for because if you end up hiring two new staff members, you’ll expand your payroll more than you’d planned for. Big firms might have the ability to hire opportunistically and shoulder the extra costs, but small and midsize firms don’t have that luxury.

Be patient, know exactly what role you’re hiring for and stick to your intended hiring strategy.

2. Be honest about advisor capacity.

Based on their service model, some firms have determined that each of their financial advisors should only work with a maximum of, say, 40 clients. Other firms, with a different service model, might put the number at 200 clients. 

Heavy turnover doesn’t necessarily come from the variance in capacity assumptions; it comes when firms aren’t clear with their advisor candidates about capacity expectations. 

To better retain talent, firms should be upfront about the number of clients their advisors or teams can effectively service. The last thing you want is an advisor who’s used to working with, say, 40 clients at their previous firm and then suddenly is expected to work with 100-plus clients at your firm.