Career Pathing & Team Incentives: Part One

I recently facilitated a breakout session at the Barron’s Teams Summit in Las Vegas. The panelists were three heavy hitters: high-performing large firm leaders – Jeff Brown, president of Stratos Private Wealth, Tony Parr, partner at Parr McKnight Wealth Management Group, and Jeff Price, managing director of Merrill Wealth Management.

Our conversation spanned a range of topics but focused specifically on how to go about building teams for sustained success. The first part of our discussion centered on insights around career pathing and incentivizing certain team behaviors and outcomes. The second part focused on designing more effective compensation structures.

The following are some highlights from the conversation that resonated with me and which I felt would be valuable to share with you in hopes that they might spawn new ideas for attracting, retaining, and incentivizing your teams. Additionally, if you’d like to receive one of the ClientWise tools we shared with the audience, just click The Prioritized People Plan Evaluator™.

Jeff Brown, President & Founding Partner | Stratos Private Wealth

When you look at your people, younger team members in particular, what they really crave are clear career paths. They want to know exactly how to get from point A to point B. It’s something, until recently, that’s really been lacking in our industry. Let’s be honest: the days of new advisors having to cold call their way to success are history. So, with the help of firms like ClientWise, we’ve invested a great deal of time and effort in designing career paths from the ground up for all our employees.

The key is to craft career paths that are very, very specific. At our firm, we’ve created three tiers of Associate Advisor roles (Level I, II, and III) before transitioning into a Lead Advisor role. Before they even start with our firm, advisors understand precisely what will be expected of them at each level, how long it will typically take them to progress to the next level, and exactly what their compensation will be at each level. And we do the same with our client service team.

We conduct two to three reviews every year – grading performance relating to each individual aspect of their role on a 1-5 scale. Only when someone consistently earns 4’s and 5’s across the board are they eligible for promotion. The response has been phenomenal, providing team members with much more clarity about what they need to do, what they will receive, and when they will likely get it. It’s proven to be an incredible motivator.

How much of a motivator, you ask? Our COO started out as an intern at my office.

Tony Parr, Partner | The Parr McKnight Wealth Management Group

As Jeff just alluded to, four of our firm’s CFPs (and equity owners) are former interns, and our next two soon-to-be CFPs also started out as interns. We’ve built a pretty robust farm team of which I’m immensely proud. And we’re moving in the same direction as Jeff’s firm in relation to career pathing and periodic reviews.

One of the first things I want to emphasize is the importance of creating a flexible work environment. I’m someone who’s on the cusp between the Baby Boomer and Gen X generations, so I was reared in the “if you’re not in the office until 6 pm every night, you’re not really working” mindset. But times have changed, and it’s important that we adapt.

So, we accommodate our team with incredible flexibility and work-life balance. At the same time, however, we know that collaboration, culture, and camaraderie aren’t formed over Zoom or WebEx meetings. If you truly aspire to a leadership role, you must be physically in the office, not working remotely. And we’ve built our office environment to encourage that – with individual offices for everyone, glass walls to let in lots of light, and sit-to-stand desks.

Additionally, we’ve crafted benefits that help differentiate our firm – from matching charitable contributions and a Donor-advised fund (DAF), which all thirteen members of our team weigh in on distributing, to underground heated parking (a nice perk in Minnesota), unlimited free books from Amazon and Audible, and free lunch in the office every day to help build unity and culture.

Jeff Price, Managing Director | Price & Associates Wealth Management Group

When I first started out, I would always look for the ‘unicorn’ when hiring—the individual I could plug and play into a specific role (portfolio manager, relationship manager, etc.). Over the years, it became more and more challenging, but I was having great success finding quality people and career developing them within our culture and our family.

I’ve come to realize that if I hire you and you're still in the same position two years later, I've made a mistake. Say we hire an intern who then transitions into an administrative role as a Client Advisor. If they end up getting stuck and not progressing out of the CA role, they become a blocker in our ability to continue to hire and develop others.

The three main equity owners of our firm are the rainmakers. But in order to develop, challenge and encourage the rest of our team, we create a ‘growth pool’ of money each quarter. There’s a whole complex formula we use to determine the total pool, but it’s based on growth (e.g., net new assets) we bring in. How each individual scores on their quarterly review then determines their percentage of the growth pool.

Everyone on our team is actively engaged in the community, and we want them to be thinking of referral opportunities – so we reward them when they introduce a prospective client and reward them again when/if we close that business. We also have financial incentives for cross-selling other services (e.g., a banking/lending or IRA rollover opportunity) and an end-of-year discretionary bonus. So there are multiple financial opportunities throughout the year.

We also regularly revise/restructure our profit-sharing plan formula to address the changing dynamics of our industry. Essentially, we’re trying to give team members a taste of what it's like to be an advisor and reward them for pursuing a path to partnership.

Clear, unambiguous career paths with measurable milestones combined with creative incentives designed to engage your team members and elicit optimal behaviors. It’s a potent recipe for sustained success in not only growing your business but in cultivating the emerging leaders who will one day take the reins and continue your legacy.

Coaching Questions from this article:

Here are five open-ended and future-oriented coaching questions based on the article:

1. On Visioning Future Structures: Given the emphasis on clear career paths and creative incentives, how do you envision evolving these strategies to further enhance team motivation and retention over the next five years?
2. On Leadership Development: As you continue to build and refine your team structures, what key qualities will you look for in identifying and cultivating the next generation of leaders within your organization?
3. On Cultural Integration: How do you plan to balance the benefits of a flexible work environment with the need for in-office collaboration to maintain and enhance your company culture as work norms continue to evolve?
4. On Feedback and Adaptation: Reflecting on the structured career paths and incentive systems you've implemented, what feedback mechanisms will you implement to ensure these strategies remain aligned with business goals and employee expectations?
5. On Innovative Thinking: Looking forward, what innovative approaches are you considering to further differentiate your firm from competitors regarding employee engagement, career development, and compensation?