As financial planning firms grow, eventually they need to hire a new planner. The question firm
owners face is this: hire someone new, or
hire an advisor who’s more experienced?
The short answer, not surprisingly,
is that “it depends.” Firms have different skill needs, managers have different
styles, and there are varying cultures,
personalities, client types, etc.
Here are some advantages and disadvantages to consider when deciding to
pursue an experienced planner versus
a new planner.
AdvAntAges of new PlAnner HIres
Hiring a newer planner can be very cost
effective, since this is typically one of the
first stages of their career. Since the firm
is likely catching them early on in their
lives and careers, these candidates are
often mobile, making national relocation
a valid option because they tend to not
have established families yet.
A new hire from a CFP Board-registered program will have a specific education that encompasses all the
main technical areas such as employee
benefits planning, investments, insurance, etc., as well as the completion of a
full comprehensive financial plan.
Some firms have found solid value in
a new planner hire’s ability to bring a
fresh perspective from their academic
and internship experiences to the organization where they begin to work. Last
but certainly not least, a new planner
brings no undesirable work styles from
another firm that can delay their assimilation into your firm and new culture.
dIsAdvAntAges of new
New planners, if this is not a career
change, look like new planners. For some
firms—and their clients—their youth-
ful inexperience can be a challenge. In
addition, new planners typically will not
have a book of business or be able to start
producing revenue for your firm for at
least a few years. They will also have to
wait 24 to 36 months to gain experience
in order to use the CFP certification,
assuming they have passed the exam.
Although mentoring and an open
attitude can help, surpassing this challenge may be virtually impossible with
firms that are already too busy or simply do not want to provide the mentoring and training it takes to effectively
give solid advice. This is why attrition
rates from the industry are still so high
in the early years.
AdvAntAges of exPerIenced
At this point in their career, experienced advisors should be CFP certifi-cants, be well on their way to mastering
the art and science of financial planning, and be skilled at building rapport
with clients. Their résumé should provide a history of their accomplishments
and show a proven track record to assist
in determining probability of success at
An experienced advisor could possess a small book of clients that the
advisor will bring to the new firm.
However, this has become less common, as more firms have moved to an
ensemble model where clients are clients of the firm and the advisor has a
non-compete clause with the firm or a
non-solicit agreement for clients.
Nonetheless, these hires can be revenue generators sooner rather than later,
and they can be good hires if their skill
set is actually where you need it to be—
and if you can unwind any “bad habits”
they may have picked up at other firms.
dIsAdvAntAges of exPerIenced
Experienced advisors often command
salaries in excess of $150,000 per year,
which puts them out of reach for many
Unfortunately, experienced advisors
are often less keen than newer planners
on being told what to do. Make sure
your expectations are crystal clear when
negotiating with the hire. Unwillingness
to change their mindset and existing
way of doing things to assimilate into the
new organization is the leading cause for
these hires to not work out.
Finally, these candidates are often
restricted to certain geographical areas
due to having an established family.
This can make relocation very complicated, raising the risk of turnover if
they are unhappy with their relocation
and making it a challenge for firms to
find a candidate already living in their
Caleb Brown is a past chairman of FPA NexGen
and partner in New Planner Recruiting LLC. He
can be reached at NewPlannerRecruiting.com.
THE NEW SCHOOL
By Caleb Brown
should I Hire a new or experienced Planner?
There are clear advantages and disadvantages to hiring a new or veteran advisor