When independent, entrepreneurial advisors want to expand, they often bring on associate managers. Sometimes it’s necessary to handle a ballooning client base.

But there’s always a trade-off. Junior staffers may be able to relieve some of the workload, but taking them on is a risk and can be draining.

“It can be tough because our business is so focused on revenue,” observes Kevin Guth, a partner, director and private wealth advisor at New Haven, Conn.-based Snowden Lane Partners. “We aren’t paid salaries. We’re compensated based on the revenue that our team produces. So when we bring someone new on board, we know there is going to be a cost.”

He points out, however, that it can also be an investment, especially if the associate has a way with clients or comes with a book of business.

Finding The Right Person
On the other hand, some financial advisors prefer to hire newbies. Jeff Gitterman, co-founder of Gitterman Wealth Management in New York and Edison, N.J., recruits three to five graduate or even undergraduate finance and economics majors for summer internships. Of those, usually only one makes the grade.

To screen recruits, Gitterman conducts multiple interviews, a personality-assessment questionnaire and a homework assignment. “A lot of times we’ll ask for writing samples,” he explains. “It’s a rigorous vetting process.”

Then, each intern chosen is assigned to a specific senior advisor. “That gives the advisor two or three months to spend with this person and see not only if they get along together but if the intern does well out in the field in front of clients,” he says. “It has to be a fit between the associate and the senior advisor as well as between the associate and the type of clients that the senior advisor typically works with.”

Trainees may get to work with more than one advisor, but each advisor will provide feedback. “The first question is: Is there an advisor in our firm who wants to pair up with the intern on a longer-term basis, because the senior advisor pays for that position? The second question is, do I as the senior partner approve?” Gitterman explains.

It’s been a successful process, he says, but it was developed after some spectacular failures. Originally, Gitterman had the senior advisors handle their own hiring of associates. “Senior advisors in their 30s may be very analytical but sometimes lack hiring know-how,” he reflects.

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