by George Tamer
Clients and prospects certainly value a veteran adviser's years of expertise and wisdom, but they also want to know who will take care of them when the veteran adviser is gone. Having a clearly defined succession plan not only puts clients at ease but it can also help you attract and retain top up-and-coming talent. And with young talent on board, your business benefits, too-firms that have a deep bench have more value than those that don't. Keep in mind, the real value of an advisory firm is what's left behind when the owner exits the business.
That is why it's important to invest in the next generation. According to 2010 U.S. Census data, Gen X (those born 1965 to 1976) numbers 49 million people, but a staggering 75 million people are part of Gen Y or the Millennial generation (those born 1977 to 1989). In comparison, there are 77 million baby boomers; there's no doubt that Gen X and Gen Y are the future of the profession. The question is: Are you effectively developing their talent in a way that strengthens your practice?
Understand Younger Workers
With 37 million Gen Y workers in the workforce, this group is quickly replacing both Gen Xers and baby boomers. Gen Y has different needs and characteristics requiring different management skills than what boomers are used to.
While baby boomers are generally optimistic and "live to work," those in Gen Y are realistic and hard working, but they see work more as a means to an end. For example, Gen Y may not want to burn the midnight oil at the office like the boomers are used to doing, but they will be checking their BlackBerrys during off hours and weekends to stay on top of the workload. Members of Gen Y grew up getting constant feedback and encouragement from their parents and typically want the same type of feedback at work. They value personal growth and meaningful work, prefer to communicate using social media and enjoy being a collaborative team player.
To effectively manage Gen Y workers and build successful working relationships, design training programs around their interactive learning styles (this may mean embracing technology and social media in new ways), understand their sense of urgency and challenge them, provide mentors within the firm and offer flexible work hours and volunteer opportunities.
Be sure to communicate how they fit into the big picture-have a clearly articulated vision and identify how they can participate in that vision in a meaningful way. Then, provide a lot of constructive feedback and schedule regular meetings to discuss performance.
Create a Career Path
One of the most important things Gen Y workers seek is an identified career path. One such career path could be starting at the firm as an administrative/operational staff member. From there, advancement to a junior adviser position that works very closely with the senior adviser could be the next step in the career path. From senior adviser, the career path progress could be to principal/owner of the firm.
Members of the younger generation may have different work styles from those of baby boomers, but if you understand what Gen Y workers value and how best to manage working relationships with them, your advisory firm will reap the benefits of employee retention and overall increased value.
George Tamer is director of strategic relationships at TD Ameritrade Institutional, where he oversees a team that helps independent advisers consider operational efficiencies through workflow processes, technology usage and best practices.
TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC/NFA.