4 Tips for Hiring an Associate Advisor

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How adding a key position can unlock growth potential

The potential benefits of growth can be widespread for firms that have the ability to effectively manage new business, clients and systems. While there are many roles one can add to an advisory firm poised for growth, few have a bigger impact than the associate advisor.

The associate advisor, sometimes referred to as a junior advisor, typically focuses on client retention in collaboration with a lead advisor allowing the lead advisor more opportunity to develop new business and oversee the firm’s most valued client relationships. The value of the associate advisor position is compelling. Research shows that the existence of an associate advisor correlates strongly with higher productivity, stronger growth and greater income—all characteristics of a firm that is building enduring value.

Are you experiencing significant growth or feeling overwhelmed from a business development and client service perspective? Adding an associate advisor might be the solution. Read our tips to adding an associate advisor to your team and help drive sustainable long-term growth.

Assess your motivations for growth.

Your first step as you consider the addition of an associate advisor should include a look at your own motivations for growth—specifically, outlining where you want to be over the coming months and years. What are you hoping to accomplish? Do you have the infrastructure and human capital resources to get you there?

Ability to Meet Client and Owner Needs Are Top Motivators for Growth

Growth does not always bring about the expected economies of scale. For some firms, profit, efficiency and productivity all decrease with growth. In addition, client service may begin to suffer under the pressure of firm growth, resulting in a decrease in client satisfaction.

The possible negative impacts, however, should not dissuade you from pursuing a growth strategy. Instead, consider that by growing your business thoughtfully and with a plan in place that considers the human capital impact, you are setting yourself and your firm up for even greater success. In other words, by planning ahead for the challenges and putting the right team in place around an organized structure, you can effectively minimize any negative impact.

Determine whether or not you can afford to bring the associate advisor into your firm at this time.

Without careful planning and an understanding of the initial economic impact, the benefits of the role could be eroded and may pose a financial strain on the firm.

To assess affordability:

Benchmark compensation – Align cash compensation with your firm’s objectives, reinforce the compensation plan with benefits, and implement professional development and retention initiatives to complement the overall strategy.

Estimate the total position cost – The cost of a new position includes cash compensation for base salary and incentive pay as well as non-compensation expenses such as insurance premiums, retirement benefits, payroll taxes and professional development expenditures.

Project break-even revenue – The benefits of the associate advisor role must, at some point, exceed the cost of maintaining it. You will need to consider the additional revenue the firm will need to generate in order to cover the cost of adding the position and maintaining your desired profit margin.

Get the right talent into your firm by getting your open position out to professionals who can recommend qualified candidates.

There are many ways you can source talent. To find the right fit, you must outline your own value proposition to your target audience and develop an interview and screening process that identifies individuals with the skill set, experience level and cultural fit you’re seeking.

Have a defined onboarding plan to get your new hire up and running as quickly as possible.

In order for your new hire to be a success, you need a plan for integrating the associate advisor into your firm and transitioning client relationships over to your new hire. This includes certain “legalities” such as background checks and reference checks, and “niceties” such as ensuring a proper space, supplies, etc. Preparing ahead of time for a smooth first day can go a long way toward ensuring a smooth first year and beyond—and can help a new hire feel immediately at home.

Conduct a client segmentation exercise to best determine which client relationships should be transitioned over to your associated advisor and over what time frame. Begin with those clients who have less complex needs and/or require minimal service support. It will serve as the basis for which clients they will interact with, take the lead on from a relationship management perspective and continue to support the lead advisor.