To be well prepared for succession, owners of financial planning practices should make sure employees are able to advance their careers within the firms. Firm owners should also learn how to manage Generation Y workers, because they’re going to be key to keeping practices alive. That’s the takeaway from a presentation at NAPFA’s Practice Management & Investments conference in New York earlier this week.

“It is about the institutionalization of your business,” said Richard Whitworth, a senior manager of practice management at TD Ameritrade Institutional. “You are no longer advisors who run a business. You are business owners.”

 According to FA Insight research Whitworth presented, about 27% of financial planning firms make career opportunities a key factor in retaining employees.

That surpasses 15% of firms that did not make career opportunities a key retention factor, Whitworth said.

Hiring and developing Generation Y workers is one way financial planners can shore up long-term viability for their firms, he said. To do so, advisors will have to appreciate a few important facts about dealing with younger workers, according to Whitworth.

Once younger workers come aboard, firm principals need to try adapting workplace practices to retain them. Younger workers prioritize work-life balances, so principals should not discount the importance of flexible work schedules, according to Whitworth. They also like a collaborative, rather than hierarchical, work environment. Compensation, interestingly, is lower in the list of workplace incentives.

“Think of it as the total package,” Whitworth said. Younger workers also crave challenging and satisfying work, and need clarity about the planning firm’s vision and values.

Interns are one way to begin integrating them into a firm, Whitworth said. Staffing a firm with interns allows the principal to vet future professionals for roles at the firm and to get new ideas for everyday operations. Also, they are cost effective.

“Interns are a goldmine for your firms,” Whitworth said. Those workers can contribute a lot to a financial planning practice, aside from the traditional filing and clerical work so often assigned to interns. They can run a spreadsheet analysis on a firm’s books of business, or research a product that the practice is considering offering to clients, Whitworth said. 

That sense of clarity also tops the list of influences that keep them engaged, according to Whitworth. Generation Y professionals like to understand a firm’s organizational model, and how their roles fit into it.

Job descriptions are also important. They should exist for senior management’s use, and subordinates need to understand what is in them, Whitworth said. “My job description helps me understand everyday what I’m there to do in the office,” Whitworth said.

 Firms should also have a process for getting new hires oriented, according to Whitworth. “Make sure they are welcomed and that there is a formal training plan in place,” Whitworth said.

The great news for advisors is that about 94% of the industry’s job seekers want to be financial planners, Whitworth said, citing the Financial Planning Association’s 2010-2011 Salary Survey.  Among the respondents in the FPA study, 81% are aiming for client relationship management roles, and 61% are looking for an investment management spot.

Interestingly, just 47% of those industry participants who are hiring are looking for advisors, according to a different study. What types of talent are firms seeking? As it turns out, 67% say they want client service and communication professionals.

That emphasis may show that firms are indeed being proactive in planning for succession, as clients will want to know who will take care of them once the founding principal has moved on to the next phase in his or her life, Whitworth said.








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