Internal Transitions: Mentoring the Glide Path

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For small aircraft, a glide path is the plane’s final approach to landing, often guided by a set of runway lights called VASI (visual approach slope indicators). In short, if all the lights on final approach are red, the glide path is too steep!

Unfortunately, when it comes to mentoring a junior adviser, we can’t rely on VASI to ensure a smooth transition. There are, however, a number of practical factors that mentors should consider when transitioning an employee from a support role to an adviser role.

For example:

  • How long will it take to get the employee up to speed as an adviser? Three to five years from beginning to competence and credentialing isn’t unusual.
  • Over time, as the employee devotes more time to adviser responsibilities, who will take over the support functions?
  • If transitioning from a salaried position to compensation based on revenue generated from clients, will the junior adviser be able to replace his or her salary and continue to grow?
  • At what point should the firm redirect the junior adviser’s salary to the hiring of a new support person? Is there a halfway point in the junior’s transition when a part-time support person will be needed?
  • Is it possible to avoid a “crash and burn” scenario, where the firm ends up paying the junior adviser as well as someone to cover his or her previous support function?

Naturally, every situation is unique, and these are just a few questions that may arise. Let’s look at a couple of other variables that may affect the transition glide path.

Sometimes, an internal transition involves keeping a junior adviser on salary and assigning him or her responsibility for a group of smaller clients. Of course, this assumes there are enough clients to transition and that the mentor adviser ends up with sufficient free time to redeploy to rainmaking, bringing on additional clients and revenue.

In other cases, a junior adviser may buy clients from the senior adviser. While this can be a straightforward approach, the junior adviser must be able to pull it off financially, and the mentor adviser may need to be flexible with the terms of the deal, especially the length of payout.

Increasingly, baby boomer advisers are facing such issues as they bring successors on board. In the next few years, the challenge for the industry will be to refine strategies for managing these glide paths, so that everyone arrives at their destination safe and sound.

Joni YoungwirthJoni Youngwirth
Managing Principal of Practice Management
Commonwealth Financial Network
Waltham, Mass.

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