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The following is excerpted from Caleb’s book, Successful Hiring for Financial Planners: The Human Capital Advantage, available from the link on this page.
At some point in your firm’s lifecycle, you will encounter financial planners who underperform. Although underperformance comes in various shapes and sizes, it’s most commonly considered an inability to complete job-specific tasks quickly and accurately. If not addressed properly, underperformers can wreak havoc on your firm’s work flow and profitability. The following six “dos and don’ts” are meant to guide you towards bringing an underperforming planner back up to the service standards that you’re accustomed to.
1. Do: Establish performance goals jointly
I find that firm owners often do a poor job communicating their expectations to new planners, and these planners go on to become underperformers months later. It’s not entirely the planner’s fault, since she can’t be expected to meet or exceed expectations that you failed to verbalize. To remedy this common problem, be sure to set specific goals and reasonable timeframes. As the leader of your firm, it’s your responsibility to create these expectations initially—preferably in writing—and then build upon them collaboratively with your new planner so that she buys in to your vision. This approach will also assist you when it comes time to do an annual review, because it will allow you to take an objective approach by revisiting the document that you and the planner developed together.
2. Don’t: Focus exclusively on the negatives
When a planner on your team is struggling, it’s your job to look for ways to boost his or her confidence. Maybe it’s a compliment on something that’s being done well—even if it’s just one thing! Realistically, if you cannot find a single thing that the planner is doing well, then you should never hire again without professional assistance. If the planner that you hired has any awareness whatsoever, he or she is probably already aware that your expectations are not being met. Take this opportunity to ask questions to find the cause of the downturn and to determine if it’s temporary. Use the conversation as a chance to build confidence and ignite the planner’s desire to succeed.
3. Do: Offer to provide additional training and resources
By this point, you’ve probably already invested a great deal of time and resources into the planner’s career, and you should be willing to exhaust all options prior to pulling the plug. Maybe the solution is as straightforward as additional training in something like time management, efficiency, listening, professionalism, or communication. Consider bringing in a coach or consultant who can assist with instruction and accountability, and can also provide objective insight into the planner’s progress and likely future outcome. Furthermore, if the underperformance is corrected, these steps that you took will instill a great sense of loyalty in the planner.
4. Don’t: Shift work to other team members
I encourage firm owners to deal with underperformers directly, and to not be lured into having other team members pick up the slack. Often times a firm owner will put off having a difficult conversation about a planner’s underperformance “until it’s a better time,” and in the meantime, the underperformer’s workload is pushed onto others. Having your high performers occasionally pick up the slack is one thing, but you endanger losing them if it continues for too long. You don’t want to send the wrong message to your high performers that they will be punished by having to shoulder more of the workload because you can count on them.
5. Do: Ask for input on what you might be missing
Consider reaching out to peers, study groups, and colleagues from the planner’s generation to gain their perspective on why he or she may be underperforming. For example, if your underperformer is from Gen Y, then reach out to a member of FPA NexGen or NAPFA Genesis. After some due diligence on your part, you may find that you simply aren’t as good at managing as you thought, and your underperforming planner is just the first of more to come. Or you may discover that you made a bad hire, or your expectations are indeed too lofty. Either way, surround yourself with people who will be honest with you so that you can accurately diagnose the problem and then work to correct it.
6. Don’t: Ask underperformers to train their replacements
Training is not what most independent financial planning firms are known for, hence one of the reasons that new hires struggle. So if a planner is underperforming, having him or her train a replacement will only perpetuate the problem. Before long you’ll be going through the same hiring and firing process all over again. Instead, think about what in the process went wrong, and how it can be corrected before your next hire.
If you’ve already tried the aforementioned strategies and you’re still not able to secure the outcome that you had hoped for, then parting ways may be your only remaining option. Terminating an employee can be one of the most nerve-wracking and difficult experiences that an owner has to face. But when a team member is underperforming, the effects can ripple through the entire firm and cause long-term damage. For this reason, if you’ve exhausted all other options and deemed it necessary to terminate an employee, follow these guidelines for the conversation and subsequent follow up.
- Deliver the news in person
Avoid terminating an employee via phone, email, or text. If possible, meet in a neutral place like a conference room (not your private office), and bring a witness, whether it’s a staff manager, HR representative, or senior employee, to validate what was said in the meeting.
- Be direct at the onset of the meeting
Make it clear to the employee at the beginning of the meeting that he or she is being terminated. Try to keep the conversation as positive and neutral as possible, but make sure the employee understands this is not a negotiation or mere “wake up call.”
Although you don’t want to appear rehearsed or like you’re reading from a notecard, creating a script ahead of time will ensure that you deliver the correct message and steer clear of any legal hurdles. After checking with your specific state regulations, compliance requirements, and HR department, consider something to the effect of, “Thanks for meeting with me. I think you know what we are here to discuss, but if not, as we’ve alluded to over the last several months, you have not been able to meet the goals that we have jointly set for you here at our company. Because of this, we are terminating your employment as we specified that we would during our last meeting. We appreciate your contribution to our firm and we will offer you the following severance package while you look for a new position.”
- Allow for self-reflection
Ask yourself what you could have done differently in the months leading up to the eventual termination. A well-known and successful firm owner in South Carolina once said, “If it doesn’t work out with an employee, it’s mostly my fault.” Even though this sentiment was not popular with some of her peers, it’s quite revealing about her management style and firm culture. Realistically, though, this is a foreign concept to many firm owners who prefer not to self-reflect and take ownership of the fact that they may be to blame. If your firm has experienced frequent turnover, then the constant in the situation is you, and perhaps a change in your management style is warranted.
Caleb Brown is the principal and founder of New Planner Recruiting, a placement service for entry-level financial planning professionals.
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