What To Do With Junior

Firms struggle to define how to use them, where to find them and what to pay them.

7/1/2008
By Philip Palaveev

It must be confusing to be a Junior Advisor—on one hand being told that you are the future of the firm (and the industry) and on the other, feeling underutilized, underpaid and generally unclear about your career. Many practices today have an employee who is not the primary relationship manager to the clients they work with, does not develop much (or any) business independently, and generally supports the senior advisor—usually the owner\principal of the practice. Yet this employee is a licensed professional—clearly on track to becoming an “advisor” at some point in their career. This is the junior advisor: The term junior is rarely used on their business card, but that is how the owner(s) and other staff members refer to them in conversations. In fact, this is probably how they refer to themselves.

The junior advisor is a sought-after employee. While only 33 percent of the participants in the 2007 Moss Adams Compensation Survey of Financial Advisors reported such a position, I know from experience that many more firms are interested in recruiting such employees. The reason why practices are attracted to juniors is a function of the size of the firm: Large wealth management firms see them as a necessary part of the client service team that creates capacity and favorable economics; small firms see them as the succession plan. Firms of both sizes struggle to define how to use them, where to find them and how to pay them—but most of all how to get them out of the junior category and grow them to full advisor status.

It is clear to everyone that the long-term answer to the talent crisis in the industry is tied to training junior. However, most firms are still leery of hiring him or her in the first place, and those that do have a junior often speak of how “young people are different today”—code for “They are not working hard enough and they expect a lot of money.” This comment comes up very often in my conversations with advisors, and I think the confusion begins with understanding junior’s job description.

Defining the position

The term “Junior Advisor” is not really a job description after all, but rather an indication of deficiency, implying that some skills and experience are missing from that professional’s portfolio. The nature of the missing piece usually describes the position more than the skills that the person has. Usually, the missing piece is sales, or business development. In many firms, especially practices under $2 million or firms with a background in the brokerage business, the lack of sales experience immediately qualifies someone as a junior advisor. In reality, there are usually two positions behind the junior designation—a technical position and a service position. Let me try to describe them: