In this month’s article, we pick up where we left off last month and examine when to make your 2nd and 3rd hires for your firm.

2nd hire

Hiring firms have multiple options at this level similar as well. If you are seeking immediate relief with planning based tasks, but not necessarily looking to substantially grow your firm by adding clients and staff, the paraplanner option can be an effective solution. Keep in mind, though, that you will be capped by the number of relationships you can personally service, which is somewhere around 150.  

Bear in mind that hiring a long-term paraplanner can help solve near-term business capacity, but may not solve the concern that typically high performing, highly motivated people want to move up in their careers. Outside of the entrepreneurs who run service firms that offer outsourced paraplanning services to multiple financial planning clients at once, it might be difficult to find someone who wants to be in a paraplanner role for the rest of their career. 

There are some firms that have taken the approach of hiring a Client Service Associate in this role, and training them on the financial planning basics, while providing the flexibility to stay in the enhanced CSA role or move up to a true Paraplanner position. Other firms opt for an Associate planner, who has already passed the CFP exam, but needs to meet the work experience requirements prior to becoming a full CFP practitioner. 

For growing firms, the path is more clear and risk for turnover reduced when new hires know there is a growth plan in place. Otherwise, we have seen firms hire CFP students in this role who become restless after a few years if the firm does not grow and therefore no way to take on more responsibility, increased compensation, and autonomy since most of them are driven, want to work with clients, and prefer not to be doing the exact same thing years later. 

3rd hire

Someone who can take on client relationships within a few months to a few years. For the firms or teams that can reach $500k in revenue, the focus is scaling to work with even more clients, at minimum keeping and ideally increasing the service standards, and providing redundancy in terms of potential departures or retirement of key stakeholders serving the client.  

Remember, though, that not all experience is good experience that will help you and move your firm forward. Make sure you have a process in place to ascertain what the skill set of the candidates you are considering, and if they can meet and exceed your expectations. Additionally, you will still need to train this person on your internal processes and procedures, and hopefully not have to unwind too many bad habits that could have been picked up if they were “trained” at another firm. 

Use this as a guide, but ultimately your hiring decisions are going to be mostly dictated by your personal and professional goals. Once you have a clear vision for how you want your life to look, you can back into how you want to structure your firm so you can get there.  Also, carefully consider your skill set in terms of how much mentoring, training and managing you really want to be doing even if you are good at it. This will help you get very clear on which way to go when progressing through the various stages of your business. 

Contact us if you would like to ensure everyone on your team is the right fit for your team, in the correct role based on their personality and preferred work styles, and aligned with your mission and vision.