Financial Planning Support Staff Hiring Decisions
I’m a huge fan of the late Stephen Covey’s book The 7 Habits of Highly Effective People. It has made a profound impact on my life and is top of my reading list. If you haven’t read it, you should get your hands on a copy as soon as you can. In the chapter on Habit 3: Time Management, he presents the Time Management Matrix which organizes the different types of tasks that we must complete. He divides our time into four quadrants based on urgency and importance: Quadrant I: Urgent and Important; Quadrant II: Not Urgent, Important; Quadrant III: Urgent, Not Important; Quadrant IV: Not Important, Not Urgent.
There are going to be reasons to hire out as the firm grows or as the financial planner shifts focus to one area or another. Knowing what type of person to hire and when is up to each individual or firm. I think this framework can be a good rule of thumb for hiring decisions. This framework is helpful for categorizing where extra bandwidth is needed. A financial planner or planning firm may want to hire a full-time or part-time secretary or relationship manger, a paraplanner or associate planner, or they may only need an assistant to help with less urgent phone calls and clerical work. They might even need to seek out a partner to the firm or lead planner, but I want to focus on support staff here.
Quadrant I: Urgent and Important Task Hiring Options
Tasks that are dealing with client concerns and are essentially the “face of the business” fall into this category. These duties require someone with dedicated office hours and a high level of experience and professionalism. A secretary or client relationship manger might be a good hire. You want someone that understands people, is highly organized, and will be available to buffer incoming issues and triage accordingly. This person needs to be professional and organized but doesn’t need to know how RMD’s work or what happens if the client just sold their home and moved to a different state. If you’re constantly being pulled away from deep work to put out fires all day, this might be somewhere to explore.
Quadrant II: Not Urgent and Important Task Hiring Options
What if more help is needed with complex financial planning tasks such as deep research, building plans, and complex analysis? These tasks require someone with technical training approaching that of the financial planner. A lot of financial planning work is done behind the scenes focused on long-term and deeply important client objectives. In essence, the financial planner is Quadrant II for their clients’ financial lives. The client has delegated and paid for their Not Urgent, but Important tasks to be handled by a professional.
This is where an associate advisor or paraplanner can really add value by taking on some of this workload. They often have completed some form of technical training, possess great attention to detail, and love to solve complex problems. However, a paraplanner or associate planner is going to command a higher hourly rate due to their technical training and in many cases, credentials and licenses. These hires should be focused on detailed plan building, research, and analysis. They are getting products as close to 100% as possible so the planner can make small changes and present to the client. Your practice might be at the stage that you can and should hire an associate planner full-time. There are many options to hire to fill a short-term or part-time gap. Options can be found to fill both types of needs. A paraplanner or associate advisor are going to be very capable of answering the phone or other busy work, but that may not be the best use for their time or your payroll dollars.
Quadrant III: Not Urgent and Important Task Hiring Options
Not every phone call warrants an immediate response. If a majority of calls or incoming traffic is in this category, then hiring an assistant or virtual assistant might be best. Often, these tasks do not require a great deal of technical training or certification to be effective. A kind, empathetic response in a timely manner will suffice. Basic scheduling and routine client correspondence will be easily filled by hiring for this role. The planner doesn’t need to answer calls directly either. Certainly, every call from a client is important, but often it doesn’t have to become an urgent matter for the financial planner. If they picked up the phone, they expect some type of immediate feedback. Having another person there to buffer these types of calls might be all that is needed.
What if I can only Hire One Person for Multiple Tasks?
You might be a growing firm that just needs a little extra bandwidth in all areas. It feels inefficient to hire for only one thing. Keep in mind that the titles used here, and in the financial planning industry in general, are somewhat arbitrary. Can you find an assistant that also can build a financial plan? Sure. Can you hire a paraplanner that will also prepare client correspondence? Probably.
The question is what are you willing to pay for each type of task? If the job would be 90% building plans and 10% miscellaneous, then spending the extra money on an associate planner or paraplanner might be the best fit. If the opposite is true, then the higher salary of the paraplanner or associate planner probably isn’t the best use of capital. Having a clear idea of exactly what you need and what you are willing to pay for will help a lot. You can hire professionals in a virtual or remote capacity to expand the pool of candidates. Just about anything is possible.
Conclusion
I hope that this discussion gives you food for thought and some good general rules of thumb for your first or next hiring decision as a financial planner. In the spirit of full transparency, I am currently a remote paraplanner myself, so I might be a little skewed in that direction. However, my intent is for people to hire and be hired optimally. When there is a mismatch in value offered versus value ordered, there can be issues. I’m in this profession to gain financial planning experience so I can help people solve their complex money problems. On the flip side, a virtual assistant doesn’t want to do complex calculations or in-depth research. They might get more satisfaction out of sending out a well-crafted batch of client birthday cards or polishing off a perfect weekly office calendar. We are all at our best when our talents, compensation, and deeper motivations align.