Nourishing successful employees will help you business to succeed.

    This profession has been under attack of late for not creating enough opportunity for junior advisors. It is true that there is room for the profession to mature in its ability to develop people and create leverageable, transferable businesses.
    But where are advisors expected to attain the skills to manage and develop people? When you were getting licensed, designated or certified in this profession-studying for your Series 7, your CFP, your CPA, your CFA or your ChFC-how many of you took a class on how to manage people and create opportunity for them? As you gather required CE credits year after year, how much content is available on being a better manager of people, or of your business in general?
    These subjects are not even credited as CE by the CFP Board. Hopefully, financial advisors nonetheless will take it upon themselves to build the skills that will grow their business and sustain their profession. Nothing is more important-to the older generation of advisors, the younger generation of advisors, and most important, to the clients they serve.
    As we work with advisors around the country who own and manage businesses, many of them want to build teams, they want to manage their staff better, and they want to create opportunities. Many, however, lack the fundamental understanding of what it takes to be a good boss and a good manager of people. Of the 1,200 advisors we have worked with over the years, I've come across only a handful that enjoy and excel at this role. But learning from those who do this well (and even from those who don't), we can gather lessons that apply across the profession.
    1. Don't just write job descriptions for people; define the desired outcomes. Define expected performance and exceptional performance for each role. Too few employees of advisory firms can answer these questions and distinguish between expected performance and exceptional performance for their own role. What they describe as exceptional performance-"show up on time, don't make a lot of trade errors"-most of us would think of as expected performance. But in the absence of great coaching and defined performance levels, many employees struggle to know if they are doing well, and what "well" even looks like.
    Don't just say that a paraplanner "is responsible for gathering and inputting data and generating financial plans for clients." Explain the role you expect them to play in client meetings and how you expect that role to change over time. Do you expect them to help identify additional opportunities with clients? Do you expect them to identify inconsistencies between a client's plan and stated goals? What do you expect them to learn in the process? Do you expect them to build their analytical and presentation skills by presenting on client issues and technical issues to colleagues in staff meetings? Do you expect them to contribute to the firm's reputation by getting involved in the profession or in your local community?
Think hard about each position in your organization: "What kind of performance in this job would just be meeting my expectations?" "What kind of performance in this job would I really consider exceptional?"
    2. Delegate good work and delegate work well. Give good instructions, and be available to coach someone through a task the first time it's been delegated to them. Don't snatch it back if they aren't doing it the way you would have done it. Recognize that the third time you delegate a task it might save you time, but the first couple of times you are making an investment.
    3. Don't hire junior staff to work with clients you don't value as a business. Instead of firing bad clients-those who are too small, not profitable or outside of the firm's target market-many firms are considering hiring a junior person to take on those clients. If the junior advisor has any skill, in a couple of years they are stuck with a full load of small clients, their capacity is tapped and their ability to grow is limited. The clients that aren't good enough for you aren't good enough for them either. You've solved your personal capacity problem by dumping it on a junior advisor, creating the same burden for them. Instead, always focus on the clients you want as a firm. When you are nearing capacity, hire a junior person to work with the firm's target clients in a support role until they are ready to take a lead role in some of those smaller, but target, client relationships. But don't hire a junior person to justify making a bad business decision to keep clients you shouldn't.
    4. Elevate your employees to your clients and to other professionals. Introduce everyone that works for you as your "colleague" and no one as your "peon." Share credit generously and blame sparingly. If something is a success, credit your staff (even if they had little to do with it); if something is a flop, take responsibility (even if you had little to do with it). Never make your staff look bad in front of a client, even if they've done something wrong. Wait until the client is gone to coach your staff on how they could improve.
    5. Use your compensation plan as a communication tool. Relate increases in base salaries to increases in roles and responsibilities and relate incentive compensation to superior individual and company performance. Tie each employee's incentive compensation to 1) personal performance and achievement of personal goals, and 2) the firm's performance and achievement of business goals.
    6. Teach employees about business management. Hoarding knowledge and information doesn't put you in a position of power; it puts you in a position of risk. No one ever learned so much about running an advisory firm from their employer that they took that knowledge and left to start their own firm. More often, they leave because of a lack of that knowledge; they have no idea what it takes, the risks involved, the appropriate returns on risk, the complexities involved in managing staff, finances, clients, compliance, vendors, benefits. We shame young advisors for not understanding the uphill climb that most advisors suffered to build and manage their business, but we also don't educate them on what running a business is all about. Don't educate them to intimidate them, educate them to involve them. Hopefully someday soon the licensing/certifying bodies will recognize that clients need advisors who can run viable, sustainable businesses that survive to serve them just as much as they need them to deliver competent, ethical advice.
    7. Share financial information. At a summary level, share revenue, gross margin, operating expenses and operating profit margin. Describe what margins you are targeting as a business and where you are focusing to make improvements to get there. Don't be embarrassed about your bottom line and how much (or how little) money you are taking home. If you are paying people fairly and they are participating when they and the firm do well, you shouldn't worry about questions like "Where does the rest of that money go?" Employees should understand there are financial benefits of ownership-this is the owner(s)' return on investment. In fact, if the owners are taking home more, this demonstrates the appeal of being a partner over being an employee, for those willing to work to earn this status and willing to take the risk of ownership.
    8. Recognize their success enhances your success; it doesn't detract from it.  As much as it may hurt the ego, the more irrelevant you become to your business, the better your life and the more valuable your business. It's good for your staff, it's good for your clients, it's good for your business, it's good for you. To put yourself in that situation, you need to build people who are as good or better than you and who are as successful or more so. Live in an abundance mentality, not a scarcity one; there is enough credit, fame and success to go around-push as much of it as you can in the direction of your staff.
    9. Demonstrate to people that you care what they think. This doesn't mean you will implement all their suggestions, or act on all of their complaints, but it means you will listen and you will value their input and their perspective. Don't be afraid that communication will validate you are doing something wrong. Ask staff for their input and their ideas on how to address the challenges.
    10. Ask people what they need from you and how you are performing in your role as a manager. Have employees perform upstream evaluations on you and anyone else they work for. If you don't think they will share feedback candidly, ask a third party you trust to collect responses anonymously and compile them for you. Ask staff to rate you and other managers on issues like:
        Is technically proficient, provides good advice, and is able to answer my technical questions.
        Demonstrates a passion for excellence in his or her work.
        Provides noticeably superior service to our clients.
        Delegates challenging work that is appropriate for my level of experience.
        Includes me in meetings with clients in an appropriate way.
        Promotes me to clients and other professionals as a respected colleague.
        Helps me to develop my skills by providing opportunities for growth and challenge.
        Conducts productive and timely performance evaluation meetings.
        Makes time to be accessible when I have suggestions, questions, or problems.
        Listens attentively and is interested in my opinions and thoughts.
        Gives me recognition for my contributions and efforts.
        Understands that it is important for me to maintain balance in my life.
        Treats people with respect.    
    Ask: What do you most like about working with this individual? What suggestions do you have that you believe could improve your working relationship?
    If running a financial advisory practice and managing people were easy, everybody would be bosses and nobody would be employees. But like all good things, success in managing people requires work. There are recruiting strategies to be considered, career paths to be developed, compensation plans to be designed. But at the root of it all, learn to be a good boss to the people you have. Their success and happiness will enhance yours.

Rebecca Pomering is a principal in Moss Adams LLP and consults with financial advisory practices on matters related to strategy, compensation, organizational design and financial management. She is co-author with Mark Tibergien of Practice Made Perfect.