Want to Drive Long-Term Growth? Hiring an Associate Advisor Could Be the Key

Kristen Terpstra
Kristen Terpstra

07.12.23 in Marketing & Practice Management

Estimated Reading Time: 6 Minutes (1057 words)

A senior financial advisor trains an associate advisor

When financial advisors think of growing their business, they often focus on the short term: increasing assets and growing revenue. But what about further down the road? If you’re looking to create sustainable growth, scale your business, or build a lasting legacy, you’ll want to expand your thinking and formulate a plan for more than just adding new clients.

One thing to consider for long-term growth is hiring an associate advisor. Whether you’re a solo practice, a multiadvisor firm, or a large-scale enterprise, an associate advisor can help you grow, evolve, and drive success for many years to come.

Here, we look at the benefits of hiring an associate advisor and examine the steps you can take to help your investment pay off.

How an Associate Advisor Can Aid Your Growth

If you’ve considered bringing another advisor into your firm, you may think the best approach is to acquire—or merge with—someone who already has an established book. But it can take a long time to find an established advisor who’s the right fit for your firm. Hiring an associate advisor, on the other hand, can benefit you in several ways:

1. Drive growth on your terms. With an associate advisor, you’ve got a clean slate—someone who will take your lead and adapt to your way of doing business. When ready, they can work with your lower-tier clients, freeing you up to focus on serving your top clients and strategizing with your team to drive growth.

2. Work with the next generation. If you have clients whose children aren’t a regular part of meetings, you may risk losing those assets when they’re passed on. Who better to work with the next generation of clients than next-gen advisors?

Bringing on someone—or a team of someones—who understands how to market to and work with those younger, would-be clients will give you a better chance of keeping the assets in-house.

3. Gain new perspectives. While you likely have systems and processes that work just fine, more eyes on how your practice operates can provide new perspectives you hadn’t considered. Associate advisors may be familiar with new software that can save time, have ideas to improve efficiency, or be able to optimize social media channels for better marketing. Change is good.

4. Ensure continuity. If you don’t have a succession plan in place, now may be a good time to start preparing. Planning at least 10–15 years in advance will help you stay on track when you’re ready to step back.

So, whether you’re a solo advisor or an ensemble, bringing on a next-gen advisor whom you can put on the path to partnership can give you time to prepare for your eventual succession and ensure your firm’s legacy. And it may give your clients peace of mind knowing there will be a seamless transition of the business when the time comes.

From Hiring to Training: How to Put a Plan in Place

Hiring and training an associate advisor will take more time and effort than bringing on someone with an established book or going the M&A route. But it will allow you to execute the vision you have for the future of your practice. With proper planning and maintenance, you can bring on the best candidate and develop them into a future partner and successor (if that’s your goal).

Here are some tips:

1. Define the role you’re hiring for. Before you dive into your search, identify what you’re looking for in a candidate. You can begin by asking yourself these questions:

  • How much experience should they have?

  • Should they be licensed or have designations?

  • When will they begin meeting with clients?

  • Will they be expected to build their own book?

  • How do they fit into the firm’s long-term plans?

Once you’ve answered these questions, you’ll have a better idea of whom you want to hire (e.g., an intern, a recent grad, or a new CFP® professional). And you can qualify candidates based on the career path you expect them to follow.

2. Set clear expectations. When you bring on a new hire, let them know what’s expected of them. That way, they’ll understand the career path changes and what skill sets and behaviors they need to develop. But remember, by setting expectations, you also need to help them maintain their progress.

3. Create a development plan. Bringing on an associate advisor is a commitment of both time and resources. Creating a plan will prepare you for what you’ll need to do to develop your new hire. Here are some things to consider:

  • Provide training. Provide them with the proper training to gain the confidence and competence they need to become a functioning advisor, which can include sales and relationship building, business development, and self-management. Also, decide what licenses or designations you want them to attain and give them a time frame for completion. If you don’t have the time or resources for full in-house training, see what programs your firm partner offers.

  • Give them the time they need. Make sure you’re available if they have questions, concerns, or problems. Be present to support them throughout their development and help them through any challenges they may face. And systematize feedback with regular meetings and performance reviews.

  • Check in on their progress. Did you set expectations as to when they’d pass their licensing exams, attain a CFP® certification, or sit in on client meetings? Remember to follow up on their progress to ensure that they aren’t juggling too many responsibilities.

  • Stay aligned. Make sure they’re achieving the goals you’ve set. If the plan was to begin meeting with clients within a year, are they still on pace for that? Goals can change over time, and the more transparent you can be about how they’re developing and what you expect of them, the better off you’ll both be.

Build Your Business for the Long Haul

Everyone has plans for growth, and no one wants their business to remain stagnant. But have you thought about your goals, both short term and long term? There’s nothing wrong with focusing on short-term growth by adding new clients and additional assets. But if you want to evolve your practice, build scale, and ensure that your firm outlasts you, you may want to consider hiring an associate advisor. When nurtured, it’s an investment that can reap many benefits.

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What your business needs to thrive now—and for many years to come.

Whether you’re just starting out or looking to take your practice to the next level, having a clear plan to grow is vital.

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