Technical skills undoubtedly play an important role in a financial planner’s career. Even though the practice of financial planning is heavily an Art, there is still quite a bit of Science knowledge that needs to be acquired for successfully helping clients achieve their goals.
There might be a few out there that come close, but no one I know of has mastered all the technical topics in the financial planning profession lexicon, because the issues a client could face over their lifetimes are immeasurable. In the past, financial planners were the gatekeepers of information. Presently with high speed internet and a 24-hour news cycle to name a few, times have changed and that barrier no longer exists, and consumers can access most of the same information as a financial professional. Because of this we have seen technical knowledge shift and become less about what you have memorized, and more about if you know where to go and how quickly it takes to look up the required information to help the client arrive at the best solution.
The impetus for this article is a firm’s hiring manager who thought that a candidate with slightly below average technical scores was a below average candidate overall. It’s worth noting that the technical assessment we administer is a micro version of the CFP® certification examination. What we found out is that this firm had placed entirely too much emphasis in candidates who knew, or at least could regurgitate, the ins and outs of [insert technical topic here] and glossed over other factors that were much more important for this role, within the team and within the firm. We understand how they and other firms have arrived at this hypothesis, and did eventually get them to see that just because someone has below average technical skills doesn’t mean they are a below average candidate if you are looking at the aggregate (because they could be well above average in other relevant communication and empathy skills).
At least for entry level positions, technical skills aren’t everything, but they are something. There does need to be a minimum baseline of knowledge a candidate must possess, and below are some areas that an entry level planner should know or can find the answer quickly. You can assess these by developing a timed technical quiz (as we utilize) or you can ask them in an interview directly to see how they handle the questions.
Here are some sample blocking-and-tackling financial planning issues new planners should be up to speed on when they join your firm… or if they are not there yet, they should be able to talk competency about these topics soon after starting with your firm.
Should I purchase or rent a home?
What benefits should I choose during open enrollment?
Should I contribute to Roth or Traditional IRA? Should I convert to a Roth IRA?
Should I purchase or lease a vehicle?
What vehicle should I use to fund my children’s college?
Should I pay off my mortgage or invest the cash into my portfolio?
What type and how much life insurance should I get?
Which mortgage loan product is right for me?
How much house can I afford?
What is the best rewards credit card?
Should I take the lump sum or pension option?
These are especially applicable if you have a candidate who expresses interest in working with the Millennial generation clientele, as many are seeking presently. Also, consider forwarding this to the new planners in your firm who are doing well and those who aren’t. It is important to remember, though, if you are seeking a candidate that is on your technical level and has all the other skills, they probably don’t exist… because they already have their own firm!
The bottom line is that firm owners should be cautious on placing too much emphasis in technical knowledge alone, and instead measure the candidate’s full value added offer. The technical aspect should be one of many data points that is captured and reviewed during the vetting process of a new planner candidate.
Stay tuned for next month’s article, on what the other data points you should measure to ensure you are garnering the full picture of a candidate’s capabilities and likelihood of a good fit.
Leave a Reply