As a Next Gen, Why Do I Need to Prove Myself?

We have been given the mandate to show our capabilities by growing our books of business to “earn the right” to work with clients. This seems very shortsighted to me – in a few months, one advisor will retire, and clients won’t even know who we are.

One of the other advisors brought this up to the two senior advisors. He said it might be good to have a clear plan in place, but they are adamant that we have to “prove” ourselves first. Then we can get more engaged. We don’t have connections; all three of us were hired because of the need for succession. We are all CFP®s and have all done financial planning and portfolio management. But we have been in support roles in our prior firms. We moved here with the prospect of working with clients directly and having a chance to take ownership.

How do we show we can grow when we have no background, and the senior advisors are telling us to “just get out and network”?

F.W.

Dear F.W.,

There are a couple of important things outlined in what you’ve written. One pertains to your direct question of how you can grow, but the other is much more important. You’ve not asked the direct question about it: How can you expect to inherit this client list from two people who seem unwilling to listen to you, have demands that you don’t agree with or meet and who aren’t treating you as future partners in the firm?

It sounds like the succession planning is pretty much one-way here. You are being told the price to earn the right to work for the clients. But your note seems to imply you were never told when you agreed to join the firm that this was the price! You might have a cultural mismatch that needs to be addressed before you think about how you all go out and grow your own books of business. I will give you some ideas on that. But consider whether it is the best situation for all of you.

Also, you are combining your situation with the other two younger advisors who have been there a bit longer than you have. Is the agreement you are sharing everything one-third across the board? Did the other two advisors collaborate with you to write what you have to me, and are you all collectively looking for answers and how to solve this? I ask this because if you three don’t have a working agreement about how you are all going to move forward and take on these clients longer term, or an agreement about how you are going to grow the firm and who is going to be responsible for what, you are likely to be going in different directions and ultimately going nowhere.

There are a few things you need to do. Forgive me if you have done any of them, but I don’t want to overlook anything as this is your long-term career involving ownership in an advisory firm. I don’t take your inquiry lightly:

1. Have a dialogue with the other two younger advisors to confirm everyone’s understanding of where this is going, what you all define as successful outcomes and the obstacles you all believe are standing in the way of success. Be sure you are all committed to similar goals and objectives, and you are all driving toward the same outcomes. If the three of you don’t agree, you are working on your own to figure this out.

2. The three of you should then request a meeting with the two senior advisors to understand their view of a successful outcome. What do they want to see happening in one to three years? What will success look like to them? Even as they say you should grow and “earn” the right to participate, what does this mean? Do you need to have one large client, 10 clients, 20 random clients – what is their expectation for success?

3. During this meeting, outline the pitfalls of not introducing you to clients sooner rather than later in the process. No one likes surprises, least of all clients. If you are buying into the firm or sharing in the revenue, you need to have some level of insurance these clients will stay. If they spring retirement on them close to the time they are leaving, your chances of saving those clients reduces considerably. I have no idea what your deal is for the transition (and if you don’t have a deal or an understanding, that’s another topic to put on your agenda). But if the deal involves client retention, you have to start now to ensure most clients stay.

4. You can show you are taking growth seriously by doing a few things:

a. Identify COIs in the area who have younger team members in your age category and stage of life who might be looking to grow their own practices. Meet with those COIs and talk about who you are and how you might be able to help them. Don’t limit COIs to attorneys and accountants; expand it to anyone who might be working with people who could be clients of yours – real estate agents, business consultants and even physical therapists or others like this. Start building your connection for referrals in this manner.

b. Join the local Chamber of Commerce. I don’t usually recommend this to advisors because it rarely yields clients. But because you are early in your growth efforts, it will give you a chance to practice your “pitch” and present yourself to other business owners. Meet these people and ask if you can schedule a coffee to learn more about them as people. I don’t know what your niche market is, and you need to be sure you are targeting people you can work with. But this helps you hone your sales skills and get out into your local market.

5. Engage your senior advisors in the process too, in the interest of growth:

a. Ask your senior advisors if there are any C-level clients who they don’t want to focus on as much, or who they haven’t met with or spoken with in a while where you could follow up and have a meeting or Zoom with them. One of my clients hired a younger advisor and asked her to follow up on the C-level clients who she has relegated to a “no point in working with them anymore” list. The younger advisor took the time to have coffee and learn about the client. She found out this client had recently inherited a few million dollars! The client wasn’t even going to talk to her senior advisor about it because she didn’t think the senior advisor was interested in her. The younger advisor saved the client and brought in the new assets. Never overlook what could be sitting in the existing client base.

b. Talk to your senior advisors about the kids and grandkids of their clients. Do they have any situations where they have not done outreach to the next generation? Is there a way you could be introduced to these people (even via Zoom or phone calls) and talk about what you do and how you like to expand the family relationships with your knowledge of the younger generation? You could offer financial education or even planning depending on the child/grandchild’s financial situation.

c. Consider, with your senior advisors, doing an event where clients could be asked to bring prospects (friends or family members they care about) and where you and your other team members could play a role. You could present on a topic, or just sit at some of the tables and talk with clients and prospects. Maybe you could just be greeters at the door!

6. After you do all of these things, you must consider whether this culture and this transition is the right one for you. Your other two team members aside, are you comfortable with what’s happening? Are you willing to stay and see how this turns out? Only you can answer this question. Take the time to consider this for yourself.

I could write five pages on this topic, but I’ll end here and wish you the best of luck. Remember you are young – this is a long-term career decision you are making. Take care how this next chapter turns out for you.

Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. The firm has won the Wealthbriefing WealthTech award for Best Training Solution for 2022 and 2023. Beverly is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. She is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).

She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.

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