“Slow and steady” are words that easily describe Tim Morton, first vice president at CIBC World Markets Inc. and senior investment advisor with the Morton Group in Toronto.
“It’s my mental makeup,” Morton says, “that I do things over a long period of time.”
That includes his approach to integrating new and younger advisors into his practice. Morton, 59, has been an advisor for 37 years. He knows how he wants things done.
A new team member begins as a sales associate and spends the first two to three years learning Morton’s investment style and finding out if he or she fits into the practice.
Once that test is passed, the associate takes on an advisor role, again under Morton’s watchful eye, for another two to three years before assuming a primary function in the practice.
By being clear about this process, Morton avoids one of the conflicts that can arise between senior advisors and their junior counterparts.
It is a conflict that George Hartman, managing partner and co-founder of Accretive Advisor Inc. in Toronto, sometimes sees arising between advisors of different generations.
What begins as a partnership can become a clash of entrepreneurial styles between an older advisor who wants to continue on a tried-and-true path and a younger advisor who would like to make his or her mark.
The first problem is the pace at which junior advisors feel they should take on more responsibility. The younger advisor sometimes thinks he or she will work with a senior partner for a few years and then essentially run the business, says Hartman: “The older advisor will say, ‘Wait a minute, not so fast. It took me 25 years to get here’.”
The key to preventing this kind of misunderstanding is in designating roles early in the partnership. Both advisors must agree on their expectations regarding issues such as level of authority, client service and marketing practices.
This agreement should be put in writing and include a timetable that outlines what will happen within 12, 24 and 36 months.
This document can change, depending on circumstances, but its presence indicates a basic understanding between the advisors on how to proceed with the business. The agreement should be reviewed every year.
Another area in which junior advisors can become frustrated involves their ideas on how to market the practice.
Javed Khan, president of EMpression: A Marketing Services Co. in Aurora, Ont., hears about this topic often during his presentations on digital marketing.
Junior advisors often tell Khan of wanting to use social media, blogs and online video to share their message, but their senior counterparts are opposed, saying it won’t result in sales.
Khan understands the junior advisors’ argument. The ways in which consumers are absorbing these messages is changing.
“People don’t trust cold calls [anymore],” Khan says. Instead, today’s prospective clients are looking for content that resonates and “hopefully builds some level of engagement and trust.”
So, instead of looking for detailed analysis of the financial markets, consumers want information that can be applied to their own lives, such as tips on budgeting or estate planning.
For any advisors who think their target market is not influenced by online content, Khan offers a counter-perspective: “If the consumer isn’t researching you as an advisor, someone within their family is. And they are suspicious if you don’t have any [digital] presence.”
Khan suggests that advisors in new partnerships settle on a trial period of six months to a year in which the younger advisor can experiment with digital marketing with a keen eye toward compliance. This way, both generations can see if their practice shows any increased engagement through the use of online content.
If more potential clients are getting in touch because of what they have read through the advisors’ website and different social media profiles, Khan says, the older advisor can only benefit.
“The older advisor will be able to take advantage because it’s probably part of his succession plan,” Khan says. “You have to let these younger advisors be empowered.”
Hartman agrees: “Give them some latitude and gradually increase their responsibility and their authority. You also want them to demonstrate that it’s the right choice. If we don’t let the young bird fly, how will we know?”
Morton also has some words of wisdom for the up-and-coming advisors: be patient and understand the amount of hard work it takes to build a successful practice.
“You’re referring to people who put decades of work into it. These people worked five to seven days a week from 10 to 12 hours a day,” Morton says.
“I think you’d have to be lucky to be able to come into a practice and be offered part of it without having that same obligation,” he adds.
© 2014 Investment Executive. All rights reserved.