Advisors leave: That's one of the realities of life for planning firm owners. Yet one of the traits that makes a great advisory firm stand out is how it prepares for and reacts to the announcement of a departing employee.

Earlier this year, I left the firm I had been working at for three years to start my own planning practice. My experience differed significantly from my previous job shift and I wondered which one was normal.

Over the past few months, I have spoken to many Gen Y employees who have left firms. Their experiences varied, of course, but some had intense stories to tell.

I've pooled their experiences here to create some guidelines for advisors and firm owners.



One planner said her former boss spent 15 minutes explaining how she had made a bad decision; he said it would hurt her career and suggested that she would be disloyal to future firms.

She spent the rest of her two-week notice period being told she was dispensable. She showed resolve, sticking around for the entire two-week period, but said it had a noticeable effect on her self-esteem when she started her next position.

When an employee leaves, it will disrupt your firm. Even departing employees understand this, and that knowledge can make the decision even harder. They also know that their departure may put pressure on colleagues.

But also know that your reaction to their announcement may change an overall positive experience of working for your company to a negative one very quickly.

When I left my first job as an advisor, my boss came and sat down with me to discuss my goals. She didn't criticize me, but pushed me a little on my decision: Did I really want to shift from working with mass-affluent families to serving wealthy executives?

She was respectful when she heard my response, however, that I wanted a different challenge in planning and was excited to be learning more. In hindsight, I realize she was right - and that understanding helped me in my more recent move.

Even if you are disappointed, consider putting on a positive face to support your advisor's move.

There may be an upside for your firm, as well, clearing the way for new talent. If a change has been on an advisor's mind for a while, he may not have been giving his job his full attention - so a staff change could give you the opportunity to bring in someone with a strong work ethic and a fresh set of ideas.



Even if you don't have any worries about employees leaving any time soon, you should make sure staff members are cross-trained in their colleagues' essential tasks. Not only does this allow for uninterrupted business operations when staff members are out of the office, but it allows for a potentially seamless transition when an employee leaves.

One devastating loss, for instance, might be a portfolio administrator - particularly if no one else has extensive experience with your portfolio-trading platform. Be sure you are not setting yourself up for disaster: If clients' portfolios cannot be traded effectively or efficiently, you may be endangering your clients - not to mention violating professional standards.

To protect yourself, set up a program that pairs team members in similar roles. Have each of them put procedures into place for their everyday tasks, then cross-train peers in their job. Even general training, if combined with detailed instructions, could be essential to your firm's resilience.



From experience, I've found traditional exit interviews to be ineffective. It would be unprofessional and impolitic for a departing employee to pick apart the employer she is leaving; moreover, the organization may not be able to hear critiques objectively.

I would prefer to redesign the process with a more positive spin: Both employee and employer should be encouraged to write a letter to each other, listing both what they appreciate and a few constructive suggestions for improvement - offering positive feedback as the two sides part ways. It may be difficult, it is usually worthwhile in the long run.

Of course, not every departure is cordial. If a situation has been confrontational, or an employee works with sensitive or confidential data, you may need to ask the employee to leave immediately. Such a policy, of course, makes cross-training even more imperative - you don't want to be caught without having other employees ready to pick up the slack.



Sometimes a staff departure can be a blessing in disguise. It forces you to understand where your practice currently stands, what staffing needs you have and what direction you should go in.

Sometimes the design doesn't need changing and a replacement should be brought in as quickly as possible. But by re-examining strategic plans and current workloads, you may find that the departure is a catalyst, helping you understand what will be the best solution for your firm at this time.

My first firm, for instance, hasn't replaced me even three years after my departure - nor do they need to. They have redistributed my workload among other staff members and redefined work patterns and procedures; in the process, they saved the cost of my salary.

One important idea: Bring your team together to discuss the organizational change. Let them share their own insights about staff responsibilities, and have them envision what the firm's future might look like without this position being filled as is.

Your staff is likely to be more in touch with the firm's daily routine; the people who manage tasks on a daily basis usually understand and can pinpoint where the inefficiencies are.

Meanwhile, the discussion - if managed constructively - will offer an opportunity to forge a new sense of team unity.



One advisor I spoke to had a very positive experience when he left an old firm. He told me that he visits them regularly and keeps up to date with former colleagues' lives.

He and the firm actually serve as referrals for each other. His former colleagues send along prospects or clients who don't fit their own needs - and he has become a reference to incoming candidates who are considering joining the firm. (Imagine the power of a positive recommendation from a former employee.)

Having an employee leave your firm can feel like a personal blow. You may ask yourself: What did I do wrong? But people change, as do their families' needs and their own career aspirations.

Take note that your departing employees are also likely to be going through an emotional time as they start the transition into a new phase of their career. By preparing your firm for any staff member leaving, your period of mourning could be much shorter.



Dave Grant, a Financial Planning columnist, is founder of Finance for Teachers, a planning firm, and Fee Only Consulting, in Cary, Ill. He is also the founder of NAPFA Genesis, a networking group for young, fee-only planners.

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