Four Books That Will Change Your Professional Life

Once you have a clearer vision of what you’re looking for, you know whether you are better off hiring a career changer with real-world experience or a graduate of one of the college programs. Each come with advantages and challenges: the career changer may have more life experiences, but that person will also have to take a step back in terms of income, and also must have the patience to learn the nuances of a new and unfamiliar field. The college graduate will come to your firm with a great deal of book-taught planning knowledge and might be more flexible about relocating, but can you count on him/her to stick with the firm long enough for your investment of time, training and money to pay off?

The book also looks at the possibility of hiring remote workers, and walks through some of the top tech solutions to facilitate it.

A later chapter helps you avoid unpleasant surprises by controlling your expectations and recommending traits to look for. Somebody with extensive experience may not be as long-term productive as a smart graduate with less experience but a great work ethic. Does the candidate possess the empathy necessary to relate to clients when you finally give him/her client-facing responsibilities? How are their listening skills?

More basically, you want to evaluate whether the resume has misspellings, whether the candidate responds to your inquiries in a timely manner and, in your initial Skype interview, whether he or she understands basics like the difference between fee-only and commission-based financial planning, or the difference between active and passive investments. The book provides some guidelines into how to evaluate a candidate’s computer skills, and a review of the different personality tests that you can administer.

The heart of Successful Hiring is insights into how you can stand out from the 20 other firms that also happen to be interviewing your favored candidate. It details what kind of work environment new hires want (opportunities to interact directly with clients in order to refine soft skills; use industry-leading software; how to facilitate their obtaining the CFP designation…) and provides some sample dialogue that you can use as you conduct the interview process.

From there, the reader is guided in how to write a compelling job description: describe your firm, describe the position you want to fill, outline the initial areas of responsibility and potential future areas of responsibility, the qualifications for the position and the employee benefits you’re offering. Some tips to make yourself attractive: contribute articles and get quoted in the industry magazines that the candidates are reading, which enhances your status and makes you a more desirable place to launch their career. Participate in social media, visit colleges and universities, be active in the associations (NAPFA and FPA) and if you’re really serious about recruiting, teach CFP classes through your local university. The book also provides a table that lists 14 job-posting boards, including some you almost certainly never heard of (snagajob.com, indeed.com and careerbuilder.com).

Your best recruiting and retention strategy is to create an attractive culture. Brown offers eight nontraditional workplace environment ideas – and they are all takeaway nuggets. I’ll only share one: Allow employees to dedicate two hours a week to work on whatever interests them, which they should be encouraged to discuss in meetings, including how it will ultimately benefit the firm.

Brown’s New Planner Recruiting is, of course, an outsource recruiter for your firm, which gives the author a real world look at what it took to bring on new hires. He provides a detailed overview of the compensation packages that young planners received in different parts of the country. There’s even a section where young planners, newly hired, share candid assessments of their situation, and what they wish they could tell their new bosses.

And then there are the appendices, which may be the most valuable part of the book:

a) Sample Job Description

b) Candidate Rejection Letter

c) Sample Interview Agenda

d) Real-World Compensation Summaries

e) Offer Letter

f) Sample Training Schedule (including an hour-by-hour description of how to handle the hire’s first day)

g) Welcome Letter

The truest thing I can say about Successful Hiring is that it doesn’t waste your time. Every word is conveying something important; you don’t have to wade through any fluff to get to the key essentials.

Facilitating the climb up the career ladder

If you want your new hire to become a successor or play a key role in the firm, he or she has to acquire managerial and entrepreneurial skills – and it won’t happy by osmosis. The best resource to help them scramble more quickly up your career ladder is G2: Building the Next Generation, by Philip Palaveev (Bloomberg Press).

Palaveev runs the G2 Leadership Institute, which provides a two-year immersion course where designated successor advisors manage a simulated firm, under the supervision of practitioners who have done it successfully. In this book, Palaveev provides a “bridge” for the people you’ve identified as future leaders, between where they are and where they will need to be as they start assuming increasing responsibility for your firm’s continued success.

What do they need? Palaveev lists a few things: interact directly with clients; manage projects that are important to the future of the firm; manage people; and bring in clients and new business opportunities.

The book starts by defining a career track – which is important because:

1. it sets clear expectations (and avoids next-gen advisors developing unreasonable ones in a vacuum);

2. it helps those younger advisors manage their careers by understanding the skills they need to master at different stages; and

3. it helps them measure their progress on a very long journey from associate planner to managing owner, senior planner and rainmaker.

You can obviously deviate from this model career path, but I suspect that most readers will adopt the definitions provided here of an associate planner (gaining technical knowledge, getting familiar with the company’s systems and procedures and obtaining a professional credential); service advisor (prepare plans, answer client questions and handle client requests); lead advisor (manage client relationships, bring in and close business and train the service team); and partner (handling client responsibilities, but also leading and managing).

Here’s one of the most important nuggets of the book: As you guide people up this ladder, don’t make the mistake of promoting simply based on tenure – or, really, on anything other than initiative and merit. If your champion staff members don’t have an opportunity to progress faster than those who aren’t working as hard or catching onto the responsibilities as quickly, it will demotivate them and you’ll end up losing your best people.

Palaveev writes that many founding advisors are too slow to let their service advisors take on a lead role and become responsible for client relationships. In his consulting work, he has seen firms that have more clients coming in the door than the founding advisor can handle, and a bunch of service advisors who are frustrated that they are not being allowed to take over client relationships.

How do you know when they’re ready? A chapter lists the characteristics of a lead advisor: mastery of the technical details, knowledge of the specific client niche and client circumstances, and what Palaveev calls “presence” – the ability to get the attention of participants in a meeting and direct that attention toward a constructive purpose.

In another significant takeaway, Palaveev tells the reader that having a social relationship with clients, or befriending them, can be overrated. It can be awkward for a 30-something lead advisor to attempt to socialize with a 60-something pre-retiree. Remember that that pre-retiree isn’t paying quarterly fees for friendship. The relationship is based on good advice that the client is able to understand and accept.

The chapter also warns you to resist the temptation to take back control of the relationship at the first sign of trouble. Yes, you could lose an occasional client as the younger lead advisor gains experience, but Palaveev compares it to letting your teenage kids have the keys to the car. There will be inevitable dings to the car’s front fender and scary moments, but most teens eventually master the art of driving. Similarly, and without too much damage, lead advisors will eventually master their role if they’re allowed the freedom to do so.

G2 addresses the common complaint you hear from founding advisors: that the next generation of advisors is not entrepreneurial enough – which, loosely translated, means they don’t know how to bring in new business. The biggest problem, says Palaveev, is that most firms have no training program in place to help younger advisors acquire this skill. And most lead advisors have no idea how they acquired it; early in their careers, they were thrust into complex and critical situations, and somehow, in the impoverished first years of their firm, they figured it out on the fly.

So what can you do? Wait until your G2 advisors have figured it out on their own? Palaveev suggests an alternative: a systematic firm-wide process for generating leads and cultivating them into long-term clients. That means helping your “apostles” (the clients who sing your praises to their friends and neighbors) give your message in a succinct and compelling story. It means writing articles, creating podcasts and cultivating the local press to educate the community about financial planning issues. It means positioning the firm (not the founder; the firm) as a hub of information.

Of course your more technically-proficient G2 advisors will participate in all these activities, including sharing the vision of the firm and its goal of helping clients with those apostles and others in the community. Then they’ll find themselves in front of a prospect, and they will need “closing” skills. Right?

Actually, in yet another nugget to remember, the book says that the idea of “closing” is a misnomer. “Closing” is actually sitting in front of a prospect and inquiring about what that person needs, looking for an opportunity to help. If there’s no opportunity to help, if the client doesn’t need what the firm has to offer, then this is not a prospect you would even want to “close.”

Once the would-be lead advisor identifies areas where the firm’s services can meet the client’s needs, this has to be communicated in a way that outlines the benefits to the client – which is to say, solving the problem. This is not a skill; it is a desire to help and an understanding of how the firm helps people attain better financial lives.

As G2 advisors take on more significant roles in the firm, they are increasingly asked to handle management duties. Palaveev breaks down what a firm means by “management” in a variety of bullet points, including coordinating staff on specific tasks, establishing accountability, providing feedback and making recommendations on the career advancement of team members.

In the early stages of advancement, the younger advisor might not understand how to prioritize and account for the time that management duties can take. This will manifest as an impatience with all these distractions from people further down the ladder who are looking for guidance and feedback, making it hard for the would-be manager to get his/her own work done. As the manager of a future manager, you have to communicate the importance of these new responsibilities he or she is taking on, and set aside time to handle them well.

Later in the book, Palaveev recommends that the founding advisor encourage the rising stars in the organization to increasingly manage themselves, to train their successors as they move up the ladder, and to mentor others across the firm. There’s a chapter devoted to how and when to add new partners to the leadership team, and bullet points where the would-be partner has to check every box:

1. contributing to the growth and processes at the firm;

2. working with clients or overseeing departments or teams in the firm; demonstrating leadership;

3. being held in high regard by the other staff members; and

4. having been accepted and supported as a part of the team, and supporting others in the same vein.

But there are conditions within the firm that have to be met as well. Are the profits of the firm growing rapidly enough to take on a new partner? Are the shares to be purchased by the would-be partners affordable? And is there financing available?

Finally, there’s a chapter for G2 readers to evaluate the partnership opportunity from their side of the desk. Palaveev provides the key questions to ask, technical issues to be addressed, and the overarching question of whether you want to commit the remainder of your career to this particular firm. The book closes with a discussion of different governance models and issues that will need to be addressed as the firm morphs from a solo to an ensemble practice, or from just a couple of partners to many.

Palaveev writes with the perspective of a long-time consultant who has spent years in advisor offices, talking through issues big and small. You may find yourself asking a question, and then reading the answer in the next paragraph. There isn’t a better guide to growing the capabilities of your key staff members than G2.

Marketing mastery

In his chapter on marketing, Palaveev references (and borrows from) a marketing book that goes into a lot more depth on how to bring in new business to an advisory firm. The book is marvelously (and counterintuitively) titled Stop Asking for Referrals (McGraw Hill), written by Steve Wershing of The Client-Driven Practice. (Conflict of interest alert: I wrote the foreword to the book.)

As the title suggests, Wershing is not a big fan of telling clients that you get paid in two ways, through the fees that you charge and the new business that the client is expected to provide you in the form of access to friends and neighbors. He believes that asking for referrals (the common advice you hear from marketing gurus) is dysfunctional; very few clients provide referrals just because their advisor is asking for them. They may even be offended that you are asking them to sell for you.

Then…? Wershing provides insight into the actual referral dynamic when he asks whether you, yourself, have made referrals. You actually do it all the time; somebody needs a plumber, a contractor, or a great restaurant in the town they’re visiting. Notice that none of these services providers got the referrals by asking you for them. By helping out your friends, guiding them to a trusted service provider or place where you had a great experience, you are gaining social capital – becoming an increasingly trusted source of information.

Clients are the same way. Just as you don’t commit to attracting a certain number of customers to a restaurant you happen to like, they don’t go around thinking about how they can influence more people to knock on your door.

So how do you cultivate referrals, if not come right out and ask for them? The obvious first step that Wershing outlines is to be “referable.” You must deliver an exceptional client experience, one that clients will want to talk about with their friends.

In addition, you must solve problems, so that when somebody asks your clients if they know a good financial advisor or a good source of advice on a financial topic, they feel comfortable that they will gain social capital by solving the problem and giving your contact information.

But these are table stakes. Wershing says that you also need to be memorable, or create a way for clients to quickly convey how terrific you are.

How do you do that? To help clients articulate who you are and why someone would want to work with you, you have to express, with uncommon clarity, exactly that: who you work with, what you do for these individuals, and what kind of problems you solve for them.

Of course, that requires two things: you gain a high level of clarity on what you do for your clients; and you identify a target client niche. The more specific, the better.

Stop Asking for Referrals includes a chapter devoted to helping you select your target niche (more specific than “women,” “retirees” or “individuals with at least a million dollars in investable assets”). A niche should be a “tribe” where people share common needs and challenges – like “highly-compensated executives with substantial wealth in stock options,” or “families who want their investment plans to reflect their Christian values,” or “couple with children from earlier marriages.”

Wershing says that choosing a niche is the equivalent of changing the way you plan to take your journey from “heading west” to “heading to Fiji.” The latter provides a lot more clarity about your journey, and it hints at another issue that Wershing covers in his book: differentiation, which can only be achieved if you can be specific as to who, what and how in your marketing efforts.

But doesn’t that preclude you from working with all those people outside your niche, and diminishing the prospects of your firm? The book suggests that some fish (prospects) will “jump in the boat on their own,” and that’s fine. That’s pretty much how it’s been working so far, right? In other words, you aren’t actively discouraging anybody from finding you on your own. You’re simply creating a more effective marketing strategy for those who fit your profile.

Stop Asking For Referrals also delves into the most reliable way to determine what makes you different: feedback from existing clients, whether through surveys or a client advisory board. (Wershing’s marketing business actually began with helping advisors create their own client advisory boards.) You learn the best ways to get the most out of these feedback loops, and in the next chapter you translate that into a brand, which begins with the elevator speech and ultimately into your marketing messages.

By the end of the book, you’re speaking at local and national meetings where your target niche gathers, and you’re providing content to the publications and blogs that your target niche reads. You’ve honed and named your service process, written the definitive planning book for your niche and your clients are providing you with advice on how to attract more people like them.

The rules of endurance

Finally, I’m not sure how The Enduring Advisory Firm (Bloomberg Press; see here for an excerpt from the book), by Mark Tibergien and Kim Dellarocca, avoided widespread publicity when it was published last year, but I know that the advisors who do read it will be a lot smarter after they’ve finished the book. The book starts by debunking some of the most common business myths in the profession (Advisors are reducing their fees; younger employees lack a work ethic; robos will be hard to compete with; the profession is about to benefit from a huge generational transfer of wealth), and then looks at major trends that will impact every planning business: declining growth for mature firms, an undersupply of advisors to serve the coming consumer demand and rising compliance costs.

The enduring advisory firm will have defined its “why” – the purpose of the firm and its mission to improve its clients’ lives. This greatly informs its strategic plan (you have one, right?), which is to take steps to do an incrementally better job of fulfilling this mission, quarter by quarter, year by year. That, in turn, defines what you will not do; an outside initiative might be profitable, but if it doesn’t enhance the “why” of the firm, it’s better to avoid the distraction.

Later chapters focus on how best to attract and serve women, mature clients, baby boomers, Gen-X clients and Millennials, who each bring different mindsets to your office. For instance, baby boomers are focused on staying young forever, while Gen-Xers and (to an even greater extent) Millennials are scarred by two major market declines during their early working years. Women traditionally have to plan for longer lives and, because they have often dropped out of the workforce for periods of time, have a less generous safety net (Social Security and pensions) to keep them financially safe in their later years.

As you attract these clients, your firm is constantly evolving, and The Enduring Advisory Firm addresses the challenges of transforming from a practice to a business. The enduring firms are better at expense control – which means they have a better handle on their evolving finances and can spot costs drifting upwards which might be invisible to a firm that is growing by accident rather than design. (The book recommends metrics to track, including revenues per professional and the percentage of their work time, on average, lead advisors are able to spend with their clients.)

Increases in scale should create constant re-examination of workflow and process, and the faster you grow, the more you need to be constantly recruiting and developing staff.

A chapter devoted to tending your firm culture suggests that there are traps to be avoided. Companies that value growing revenues above all else will encourage mercenary behavior by the staff – and prove to be not enduring going into the future. On the other end of the spectrum, firms with a missionary culture might tend to underprice their services or make pricing exceptions. Staff turnover is more often related to company culture than to any other factor, especially (here’s a nugget) if your firm’s stated mission is not closely reflected in your company’s actual activities in the marketplace and with clients.

The final chapter is about leadership – and I hope I’m not giving away the ending by saying the authors think it’s better for the firm if you’re a good leader than if you’re a bad one. But what does that mean? In the view of Tibergien and Dellarocca, leadership is about behavior, which means living your personal values openly in the office, and personifying the values of the firm. The book provides a very good, succinct list of leadership qualities:

• Value creativity and innovation.
• Never rest on the status quo.
• Be an agent for positive change.
• Think strategically.
• Be a strong team player.
• Strive for excellence in all that you do.
• Honor and respect the strengths of each of your teammates.

The consistent theme throughout the book is that building a firm that will endure beyond you (or anyone else) is attainable by almost all practitioners, but it does require a certain thoughtful approach, some defining principles that are etched in the fabric of our economic system (and human nature), and a wariness about conventional wisdom.

All of these books are relatively short, compact and full of insights – because the kind of advisor who would want to read them doesn’t have a lot of time to waste. Each author has the enormous advantage of experience in the subject matters of, respectively, hiring and tending new talent; bringing G2 talent from the bottom of the career ladder to the top; creating an effective, dynamic marketing program for your firm; and building a business that will endure after you’re gone.

If any of these things happen to be one of your strategic goals going forward, then add these four books to your reading list, and devote some of the downtime of the late summer to absorbing the wisdom of the masters.

Bob Veres' Inside Information service is the best practice management, marketing, client service resource for financial services professionals. Check out his blog at: www.bobveres.com. Or check out his Insider's Forum Conference (for 2018 in San Diego, CA) at www.insidersforum.com.

Read more articles by Bob Veres