How Much Should I Pay My Staff?
Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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I am interested in any guidelines on paying and compensating my assistants. I work for a major wirehouse and am responsible for adding incentive compensation. Is there any calculation? I am a veteran and my assistants are as well. They recently felt I wasn’t paying them their worth. Is there any acceptable source to help?
Dear R. H.,
This is one of the more challenging questions to answer in our industry for a few reasons, including the duties of the role, the geographic area in which you work, whether you are trying to keep a good team player in the seat, the budget or advisor’s willingness to share more of the overall pot and the market conditions. I hear a number of advisors wrestling with this question because there are more great jobs than there are great people and many team members know they are marketable.
There is of course a lot of benchmarking that’s been done. Depending on your wirehouse, your HR team or practice management group can likely give you guidelines around what they are seeing for other teams in the company with your range of AUM, number of clients, tenure and job responsibilities for all-in salary once incentives are added in.
Assistants are the heart of a team. They are undervalued. They aren’t finding clients, but they have everything to do with keeping clients and allowing the veteran advisor to focus on higher gain activities. If your assistants feel you are not paying them what they are worth, look at other jobs in the area that would be similar. Seek guidance from internal partners to find out a reasonable range but then – if your assistants are really valuable to you – pay toward the higher end of these ranges at a salary level so that incentive comp really is an incentive.
Tying incentives to new client fees, retention of clients and other quantitative goals such as turnaround time to respond to clients, or scores from client surveys can be useful. This allows for tracking and ties the assistant’s behavior to results. You can also have a qualitative component. But that gets tricky and sounds like more of what you are doing right now – your assistants don’t feel you are paying them their worth, but is there a basis for measurement you’ve both agreed upon to discern this? The more you can agree, in advance, on quantitative and qualitative measurements, the easier it will be to develop an incentive approach.
Look at salary and make sure you are at the upper end (assuming these are top performers) for your firm and area for this type of role.
Establish agreed-upon milestones for generating an incentive amount.
Target the incentive to between 20-35% of overall salary so the number is meaningful enough your assistants will really want to work toward it.
How do we find good talent? I know you have addressed this before. I know to tell a good story and let people know of the opportunities for growth and advancement. But we are in a major metropolitan city and we have been looking for months and months for junior advisors to come in and take a load off our senior advisors’ plates.
We talk to candidates – in our last round we had about 40 resumes and there were three people we were willing to consider. We decided against all of them. Your focus has been on getting people to respond but our focus is on culling the herd and getting the best talent, which doesn’t seem to come through traditional channels.
Today I had two on-screen meetings with clients wherein someone asked about finding good talent, and a catch-up call with a client wherein that person mentioned wanting to find a new place to go but struggled to figure out which organizations would be the best fit. It’s an ongoing challenge in our profession and others as people change their seats, figure out what they want to do and walk away from a career or job focus.
My pontificating is not going to help you, but here are some ideas:
- Treat finding talent as you would locating new clients. Go to networking events, join groups where people have similar interests, ask your team member (and your clients, and your COIs) to bring someone who might be a good fit to a next meeting. Make sure you are not solely dependent on the traditional process of posting a job, reviewing applicants, interviewing and then rinse and repeat. Get outside of the box.
- If you don’t have a hiring incentive in place, implement one. You can ask team members over and over who else they know that might be a good fit but add in a monetary component and people tend to get more energized about making a recommendation.
- Get cozy with the colleges and universities in your area. If you are not comfortable with someone right out of undergrad, get to know the professors in the graduate program. I teach managerial skills and leading teams and have identified many students over the years who have experience and the communication skills to fit well with my client firms. I have even hired two of them for my firm. Don’t just go to the career center. Send emails and ask for a conversation with the professors. They know the students and have the personal connections.
- Change your outlook. You might be looking for only people with experience, or you might not want to take someone who has worked at a certain type of firm, or you might want to groom new advisors to fit your mold. Whatever your thinking, challenge it and see whether a different approach might open things up for you a bit more. I’ve seen many times where a firm walks away from a great candidate because they have a certain approach in mind and the candidate does not fit the mold. You might be limiting your choices by doing this.
The right person is out there. Don’t blame the marketplace or the candidate pool. Look at your practices to see what you can shift for better results.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. She is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.