How Next-Generation Advisors Can Avoid Hiring Disasters

Key Points

• In-person interviews are crucial for assessing candidates, as behaviors and concerns may not be evident in phone or video conferences.
• Using a recruiter can significantly streamline the hiring process by pre-screening candidates, saving time for internal teams.
• Asking thoughtful questions about failures and openness to feedback, along with real-time exercises, helps gauge character and collaboration skills.

Early in her career, Leslie Norman, the 39-year-old chief technology officer of Dynasty Financial Partners, made the mistake of overvaluing credentials. She hired someone who seemed perfect on paper for a product management position. However, the first time she brought the person into a brainstorming meeting, the individual, who had attended a competitive school and worked at top firms, repeatedly shot down other team members’ input. She remembers thinking to herself, “I didn’t hire a partner; I hired a résumé.”

If you are having repeated hiring failures, it’s important to review your processes and identify where things may be going wrong, says Leslie Norman of Dynasty Financial Partners. Photo: Dreamstime

Adding new staff can be daunting under the best of circumstances. For newer advisors, the process can be even more unnerving because they may be assessing candidates for the first time.

Getting it right from the start, however, can mean the difference between a good, long-term match for the team and a hiring horror story.

Here are five tips to help next-gen advisors avoid hiring disasters:

Hold in-person interviews. Advisors may be tempted to save time by conducting interviews by telephone or videoconference, but this shouldn’t replace in-person meetings. That is because certain behaviors or concerns might only become evident in person, says Patrick Fruzzetti, the 46-year-old partner and managing director at Rose Advisors in New York.

He offers the example of a candidate in his mid-20s who interviewed for a client service associate role. He seemed personable on the phone, but when Fruzzetti conducted the in-person interview, the candidate spoke about his investment ideas and the research he had done, strongly indicating he wanted to be a full-blown advisor. “It came across that he had no interest in working as an associate for two years to get to the next [stage], and that’s what we really needed.”

Fruzzetti says he couldn’t necessarily have determined this from a phone call or videoconference. When they’re not in person, people tend to have notes, so they don’t have to think as much on their feet. A lot can come out during in-person interviews, especially longer ones, Fruzzetti says. That is not to say some bad apples can’t slip through, but it lessens the chances.

Consider using a recruiter. Derek Wittjohann, the 37-year-old partner and chief operating officer at Premier Path Wealth Partners in Madison, N.J., has an external recruiter on retainer to help manage hiring. The recruiter weeds out many inappropriate candidates, so team members don’t waste time interviewing people who definitely won’t work out. “That is been a huge lift from a capacity perspective,” Wittjohann says.

Derek Wittjohann, partner and chief operating officer, Premier Path Wealth Partners Photo: Courtesy of Premier Path Wealth Partners

Before using a recruiter, Wittjohann interviewed several doozies, like the candidate who walked a dog during the interview. Now, the team sees only candidates who have real potential. For one recent position, the recruiter winnowed 13 candidates out of 256 applicants. That is a huge time saver, Wittjohann says.

Ask thoughtful questions. Norman of Dynasty says she can learn more about a person from hearing about their biggest failures than their biggest successes. Advisors should also try to gauge the candidate’s openness to feedback, while building in real-time exercises to test collaboration skills, she says.

Fruzzetti likes to pose questions that help him get a strong sense of a candidate’s character. He recalls asking a candidate in her mid-20s seeking an administrative assistant role for a word that defined her. He was hoping to hear something like “dependable” or “reliable.” She answered, “crazy.” He questioned her about her answer, and she changed it to “unpredictable,” but that didn’t sit right. Later in the interview, she asked about vacation time, which bothered him because her overall behavior raised concerns about her work ethic. She didn’t get the job.

Follow your gut. Wittjohann met with a candidate in his early 30s who was seeking a junior advisor role. The candidate dressed casually and didn’t bring anything to take notes with. Wittjohann says he was surprised at the candidate’s lack of preparedness and his attire, since people typically wear more formal clothing to an interview. He gave this feedback to the candidate and was taken aback when, at the second interview, the candidate again came in casual attire and without a writing implement. “If you can’t take the advice we gave you, that’s a red flag,” Wittjohann says. The candidate wasn’t hired, and Wittjohann feels the firm dodged a bullet.

Refine your hiring processes. Sometimes, even with sound procedures in place, advisors make hiring mistakes. But learning from these mistakes is critical, Norman says.

The experience with the highly credentialed bad hire was a big ah-ha moment for her. She now makes sure to look, not just at a candidate’s credentials, but also for cultural fit, emotional maturity, and other character points that make someone stand out. In certain roles, the prospective employee needs education or experience that can give the hiring manager the confidence that the person can do the job, but it is only one dimension of the decision, Norman says.

Certainly, if you are having repeated hiring failures, it’s important to review your processes and identify where things may be going wrong, she says. Even if you’ve had one or two failures, it’s a good opportunity to review what’s working and what’s not. Norman offers examples: maybe you missed an important probing type of question in the interview process, or you aren’t asking candidates to demonstrate their collaboration skills, or appropriately assessing their ability to be team players.

James Giaccia, a senior financial advisor with Merrill Wealth Management in Washington, D.C., in his late 20s, says his team reworked its interview process a few years ago after a bad hiring experience. The firm hired a junior advisor who had just graduated from a top university. He had an affluent network and presented himself well but had trouble making connections, and, as time passed, it became clear that he wasn’t focused on relationship-building. “Today, it’s more about being a life coach than having somebody who can pick the best stocks for you,” Giaccia says.

James Giaccia, a senior financial advisor with Merrill Wealth Management Photo: Courtesy of Merrill Lynch

The advisor was let go after two years, but that experience changed the team’s hiring approach. Now each new hire meets with members of the hiring committee at different points, as well as the entire team, to get a sense of who everyone is and the overall team vibe. The team also changed their interview questions. Now, for example, they always ask prospects why they want to be an advisor. People they hire must have deeply personal reasons for being an advisor, which can help in the client acquisition process. Asking the “why” question can reveal motivation, an important factor in cultural fit.

The team has since hired a handful of advisors using the new process, and they are all integrating successfully, Giaccia says. “We wanted to make sure they had the proper foundation to succeed.”

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