Marlo Stil of The Wealth Consulting Group in Rancho Mirage, California, takes very seriously the process of hiring a senior adviser, performing extensive due diligence to determine if it would be a good fit.
With one recent potential hire, she initially talked to wholesalers of financial products about the adviser.
“They know her book of business,” Stil says. “I’ve gotten greenlights from three of them; that was my level one.”
Stil then spoke with other advisers in her region about the prospect and got “two thumbs-up.”
But there is one additional step she hasn’t yet taken to figure out if she has set her expectations accurately about the quality and quantity of clients whom the adviser will likely bring aboard.
“I haven’t had the courage yet to say, ‘Can I talk to some of your clients,’” Stil says.
She plans, however, to follow through with that additional verification.
In addition, Stil evaluated how existing clients might respond to the potential hire by asking the candidate to give a presentation to a few top ones.
Gina Petrelli Aldaz also uses care and caution when her firm considers adding an adviser to its team as a way of expanding its client base.
“Our intent is always to hire high-integrity individuals,” says Aldaz, who is a wealth management adviser with Talis Advisors in Plano, Texas.
“That being said, much of what we take into consideration would center around the circumstances at their current employer,” she says.
Aldaz doesn’t expect, for instance, that an adviser defecting from a large wirehouse will bring a big book of business.
“These institutions have a number of policies such as non-competes and procedures that prevent a book of business from leaving the source,” she says.
If the prospect is leaving a registered investment adviser, however, “then a conversation about their book of business would be a part of the negotiation,” Aldaz says.
Talis Advisors also takes a long road through the hiring process.
“As the negotiation evolves into a relationship, we ideally would have a conversation about each client and go over their financial plan and relevant documents and acquaint ourselves with each client's situation,” Aldaz says. “We have a team approach at Talis, so the client would be served by a team.”
The firm also checks the prospect on the Securities and Exchange Committee's website.
“This allows us to verify the adviser's registration history, passed exams and most importantly any disciplinary actions taken against them,” Aldaz says.
The Form ADV that the prospect’s firm has filed would identify assets under management.
“Though this wouldn't give you client detail, it would give you an overall idea of how much the firm manages," Aldaz says.
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