Wealth management as a recruiting and retention tool
It’s not news that succession planning is a challenge for many accounting firms and tax professionals. The need to attract and cultivate younger professionals to maintain continuity of client service and to provide an exit strategy is crucial.
Unfortunately, “All too often we unwittingly fail many of those younger members of the team and they move on,” according to Dawn Drewitz, MBA, CFP, ACC, a senior business consultant of HD Vest Financial Services. “It doesn’t need to be that way.”
As a general matter, younger people need to have a realistic expectation not only of advancement opportunity, but of a fulfilling career. “For many,” said Drewitz, “knowing that they can help clients with their financial needs on a comprehensive basis gives them confidence they will find that fulfillment.”
While some who enter the field will be content to focus exclusively on tax and accounting services, others will find more satisfaction in assisting clients to achieve their financial dreams by helping them with their saving and investment strategies. “It can be frustrating when your role is limited to helping clients make the best of a bad situation after the fact due to uninspired investment strategies and a failure to allocate investments optimally between taxable and tax-deferred or tax-free investment vehicles, for instance,” Drewitz said.
In addition to giving young professionals the prospect of serving clients on a holistic basis, Drewitz offers the following tips on helping them become more grounded in their careers and more committed to the business:
1. Decide which tasks to delegate, and when. Many accounting and tax professionals are accustomed to performing a range of tasks by themselves and are reluctant to delegate work to others. Delegating tasks will not only free up precious time but will also help newer team members to participate in the life of the firm and learn the ropes, allowing you to communicate your beliefs about how the firm should be run.
2. Articulate a clearly defined career path. It’s important to spell out to new recruits a reasonable career path they can expect to follow. Without a clear path and the chance of advancement, many young advisors find other opportunities. Drewitz recalled conducting a workshop with young team members who had already been named as the successors for their practice. “However, there was a lot of frustration because they weren’t sure when or if the transfer would ever happen; some had been the heir apparent for 10 and 15 years with no idea of when they might reach the next level,” she said.
3. Communicate the new position’s specific roles and responsibilities. Starting when you interview a candidate, you should lay out a clear understanding of the specific duties of the position. “For example, in a business that grows largely through personal referrals, new hires who are starting fresh with very few contacts need to understand how they are supposed to go about making themselves productive and useful to the firm,” Drewitz noted.
4. Set performance standards. As new team members start out, they need to know what is expected of them, and what may be beyond their reach. “Too often,” Drewitz said, “young professionals are left to their own devices and can be found sitting at their desks, wondering what they are supposed to do and how they are to go about it.”
5. Design a compensation structure that promotes the behavior you are looking for. “Many young people begin their careers with burdensome student debt and are highly sensitive to their potential earnings trajectory,” according to Drewitz. “Compensation systems need to show a clear path towards helping them achieve financial success.” The solution is to create, at the beginning, a clear, standardized formula for compensation that will allow new and junior team members to earn enough to take care of essential needs, while giving them an incentive to perform the duties you need them to.
Not every firm principal is equipped to work through all of these steps without some support. “One good way to prepare for this is to work with a broker-dealer with a good coaching program,” Drewitz said. “The key is to enable you to fully embrace the future and gain the most rewarding outcome for all concerned.”
For more information about HD Vest Financial Services and how they can help you transfer a client’s wealth, visit hdvest.com/join or contact a Business Development Consultant at (800) 742-7950.
HD Vest Financial Services® and its affiliates (collectively, “H.D. Vest, Inc.”) do not provide tax or accounting services. You should consult your tax professional regarding the tax implications of any investments.
The views and opinions presented in this article are those of Chad Smith and not of HD Vest Financial Services® or its subsidiaries.
HD Vest Financial Services® is the holding company for the group of companies providing financial services under the HD Vest name.
Securities offered through HD Vest Investment ServicesSM, Member SIPC, Advisory services offered through HD Vest Advisory ServicesSM, 6333 N. State Highway 161, Fourth Floor, Irving, TX 75038, 972-870-6000.