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A key to success for an advisory firm hiring other advisers is making sure that you align the interests of both parties. That is, getting the behaviour you want as an employer while ensuring that the new adviser is most likely to be getting the outcomes they want too.
There is a fundamental principle of strategic remuneration design which holds the key to achiving this:
You get the behaviour that you reward.
So the big question that sits at the centre of getting interests aligned is “what behaviour do you want?“
Are you really just wanting sales or revenue targets to be achieved? If you are, and you set remuneration and management objectives focussed purely on that outcome, then you have to expect that there will be little consideration given to whether business quality is good, or customer satisfaction goals are being met, or whether the the type of business being generated is actually good for the firm in the long run.
The new adviser who is given simple gross revenue objectives and managed specifically to achieve them will give nothing more than token regard to these other issues, because that behaviour is simply not being rewarded. One thing you can bet on with most human beings, especially employees, is that they will do mostly what is good for themselves.
So, consider the following questions when designing your remuneration and employment structures, as they WILL drive the behaviour of new advisers. Considering these questions, and ensuring you reward the behaviours you want will ensure that you have aligned the interests of each party, which is the foundation of a successful employee engagement.
- What are the firms strategic objectives and key performance indicators?
- What KPI’s of the firm are directly impacted by adviser behaviour?
- What are the core activities and focus areas for an adviser in your firm? Can they be measured, and therefore become adviser KPI’s?
- Are there shared responsibility areas where co-operation or teamwork are vital to achieving the firms objectives that need to be factored in?
- What are the values, or ethos, of the firm which MUST be adhered to, and need to be clearly stipulated?
Designing remuneration or employment conditions that work to align everybody’s interests, and reward the behaviour that drive the firm towards its strategic objectives begins with being clear about these initial questions.
Related: How To Challenge Clients Thinking Without Being Confrontational