With the failure rate for new financial professionals at 80-90 percent, hiring an associate can be a costly decision if not handled correctly from the start. So before jumping full speed ahead into recruiting, it’s important to first consider what you hope to achieve by adding to your practice.
Generally, there are four strategies that call for hiring an associate:
1. Branch Leverage:
Is your practice currently growing quickly with referrals coming in fairly regularly, and is your practice reaching (or beyond) capacity to serve all clients according to your client service standards?
2. Long-Term Succession Plan:
Are you looking to bring in younger financial professionals or groom a novice to be your eventual succession partner? This is a long-term strategy that can take up to 10 years to come to fruition.
3. Principal Leverage:
Is your personal practice currently overwhelming you, and does your work-life balance seem out of control? Do you want to spend more time with family or on pursuits outside of the practice?
4. Multi-Generational Focus:
Are you looking to add younger financial professionals to bring multi-generational clients to the practice, specifically to work with the children of your top clients? Many financial professionals are at risk for their practice shrinking over the long-term as their clients age and eventually die. Heirs often move the assets they have inherited to their financial professional of choice – especially if they do not have a relationship with you.
Whatever reason you have for wanting to hire an associate – whether to support your fast-growing practice or to help you slow down – be sure to carefully plan and weigh your options. It is not a decision to be made hastily.