Journal of Financial Planning: June 2023
David Israel is the vice president of field outreach at Commonwealth (www.commonwealth.com). With the firm since January 2015, David orchestrates all aspects of the practice management department’s suite of proactive outreach programs and manages team members so they are fully engaged in delivering powerful client experiences. He earned his M.B.A. from Babson College. David holds FINRA Series 7 and 63 securities registrations.
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When setting up next-gen advisers for success, financial advisory firms often focus on technical skills and training. On the one hand, this makes sense. New advisers need to hone specific skills, such as creating a financial plan, onboarding clients, and navigating a CRM system. Learning these aspects and processes through a training program helps integrate the new adviser into the firm and teaches them the standard operating procedures. After all, a lot of thought goes into the portfolio models leveraged, the estate planning questions asked, and how the firm builds client relationships—and learning the firm’s leading practices can save a new adviser energy and time.
But once the technical proficiency is acquired and integrated, firms often need help with the next step. How can they empower next-gen advisers with the additional confidence and expertise needed to succeed? While some new advisers can learn simply by shadowing senior advisers and peers, not everyone has access to a top adviser.
That’s where a mentoring program can play a critical role in a firm’s success. When done well, mentoring can help both new and experienced advisers, bringing tangible benefits to the whole firm. According to Mary Abbajay at Forbes, “Organizations that embrace mentoring are rewarded with higher levels of employee engagement, retention, and knowledge sharing. In fact, mentoring has proved so beneficial that 71 percent of Fortune 500 companies offer mentoring programs to their employees.”1
If mentoring programs are contributing to the success of Fortune 500 companies, they might also be worth exploring for advisory firms.
How Can I Start a Mentoring Program?
Over the years, I’ve worked on formal and informal mentoring programs, and I have seen when they work best—and when they fall flat. So with the goal of everyone benefiting, the following tips can help your firm create a successful mentoring program.
- Be intentional. Before starting a mentoring program, a firm should have a goal and a plan for its advisers and communicate its expectations. Drafting unwilling people is seldom successful—you’ll only waste time, energy, and any goodwill for a future program. Likewise, firms can’t simply assign people arbitrarily to be mentors or mentees and expect positive results. The best scenarios are when firms carefully consider what a new adviser needs to succeed at the next level and then try to pair that adviser with someone who can bring them further along.
This process can be difficult for those who have never engaged in such work. Seasoned advisers must step back and recognize that although they are experienced and successful, mentoring requires a new skill set. We want to remind these advisers not to be afraid to seek input and ask for help—and while this type of approach may require more work initially, it also ensures a much higher success rate. - Pair the right participants. As you begin your search, a key question that often arises is how to find the right mentors and mentees for the program. A natural instinct may be to connect advisers who are similar to one another. While this can work, we suggest finding a mentor who is different from you. Think of differences in age, gender, race, or hobbies—pairing participants with different backgrounds will help them to develop new competencies and expertise. This collaboration can also foster diversity in your firm.
Getting to know the people in your organization will also help you build relationships and identify new recruits for your program. You can do this organically by making small talk in the break room or discussing weekend plans, but you can also seek out specific projects that give you face time with people not typically in your purview. This process will give you opportunities to make more connections, further your brand, and broaden your centers of influence. You’ll have the chance to learn about new people and, as a result, find colleagues willing to serve as mentors and mentees. - Set parameters before you begin. While seasoned advisers may be open to the idea of mentoring younger advisers, they will naturally be concerned about time constraints. We suggest that you not only set goals for the mentoring process but also discuss the time commitment and end date. It is much easier to agree to meet twice a month for six months than to sustain an ongoing, no-end-in-sight arrangement.
By putting a structure and parameters in place, this will help mentors conduct shorter, more focused “sprints” on specific topics. For example, a next-gen adviser wanting to learn more about financial tools and plans could request a 6–9-month arrangement to do a deep dive into planning. When that time is up, the new adviser could move on to another mentor who is an expert in portfolio allocation. By participating in mentoring sprints, new advisers can gain key insights from knowledgeable sources in a short amount of time. Additionally, we always encourage mentors and mentees to set an agenda and a goal before each meeting. This approach helps participants prep for sessions in advance, keeping everyone on track. - Make sure the relationship benefits everyone. When you have a great mentoring relationship, it’s a win/win/win. How? The mentees gain access and ideas from successful advisers who can guide and coach them toward their goals. The seasoned advisers benefit because when they articulate their strategies and processes to someone else, they often find ways to improve them. And the firm as a whole wins because the shared experiences make the firm more connected.
And when you step outside of day-to-day roles, you often have the ability to make room for new ideas. For example, a next-gen adviser may be able to share new ways of connecting with clients on LinkedIn or Instagram or through virtual networking events. A mentorship shouldn’t be a one-way street—it should be a productive collaboration for all parties involved.
What About Existing Programs and Workshops?
Another way to approach mentorship is to engage in a formal program or workshop, if your firm offers them. The benefits of a structured program are that accountability and progress may be measured more efficiently, and expectations and goals are more clearly outlined before embarking on a path. In most cases, the participants benefit from being part of a larger group, so they can learn from both their mentor and the other attendees in the room. Structured programs tend to run for 12–24 months, with multiple mentors and mentees participating in a comprehensive, continuous process.
As part of a long-term approach, our firm, Commonwealth Financial Network, engages seasoned advisers and their associate advisers in a year-long intensive workshop to foster professional growth toward goals (i.e., a partnership track). In one of these workshops, a seasoned adviser of almost 40 years perceived that her associate adviser was not proactive enough and didn’t seem to be progressing toward becoming a lead or producing adviser. That perception had been created somewhat in a vacuum, with little outside context and basis for comparison.
The dynamic completely changed when the adviser and her mentee engaged in a workshop with 10 other pairs of seasoned and associate advisers. It was the first time they both could receive feedback, insights from their peers, and suggestions for improvement in a vulnerable yet supportive environment. Both advisers achieved growth in their perspectives and attitudes during the process. The associate adviser found her voice, grew her skills, and became a key contributor as a producing adviser. The seasoned adviser learned that her associate was more accomplished than she realized and ready to take on more challenges. Both parties gained clarity on their objectives moving forward, and others in the group benefited from the broader discussions and the iterative process.
If mentoring opportunities aren’t available at your current firm, don’t give up. Perhaps you can create an informal study group with next-gen advisers who are your peers. Remember that everyone has something to contribute, and a great mentor/mentee relationship doesn’t need to revolve around age. And when attending FPA meetings or industry conferences, pay attention to the roundtable and breakout discussions. You could engage with fellow participants and meet in the future to continue the conversation.
Pay It Forward
Mentoring can help all parties in the relationship—as well as the advisory firm—succeed, and we hope that potential mentors and mentees will take advantage of the opportunity. Perhaps it’s time for senior advisers to pay it forward and give back the same help and encouragement they received when they were new to the industry. If you’re honest with yourself, you’ll recognize all the instances where someone stepped in to guide you and keep you from making an error.
Consider what you find useful, and understand that you don’t have to be the perfect adviser to help someone else. Others can benefit from hearing about when you tried and succeeded and also when you wasted time and didn’t achieve your intended results. In our experience, sharing both the success stories and the missteps deepens the relationship between mentor and mentee. And that’s something every firm should strive for.
Endnote
- Abbajay, Mary. 2019, Jan 20. “Mentoring Matters: Three Essential Elements of Success.” Forbes. www.forbes.com/sites/maryabbajay/2019/01/20/mentoring-matters-three-essential-element-of-success.
Commonwealth Financial Network, Member FINRA/SIPC