The aim of the SLICE survey, which runs 3 times a year (each time on a different theme) is to provide financial planning practices with an opportunity to share their views and insights with their peers and build an understanding of the most effective approaches to a broad range of hot button topics that challenge practices’ efficiency, profitability and viability. The latest SLICE survey focuses on financial planners marketing strategies.

Survey authors, Peter Dawson of The Dawson Partnership and Susan Rochester of Balance at Work, say the latest survey provides data to confirm what they have observed among financial planning practices.

The vast majority of financial planners surveyed have a marketing plan (83%) with 73% of those with a plan saying they put the plan together either on their own or with their business partner(s) and 47% drawing on the resources of a practice development manager. 33% had input from a business coach.

‘Up until a few years ago our marketing plan was pretty rudimentary but as time has gone by we have adopted a more structured approach with regular marketing planning and review meetings that we hold each quarter. This has helped us keep a focus on our marketing campaign making sure it remains relevant to our business and helps us achieve our goals.’
Principal SME financial planning practice

Of those businesses with a marketing plan 53% said that having a plan in place has opened up new opportunities with 40% saying that they were unsure if having a marketing plan was responsible for new opportunities that arose for their businesses.

While most respondents don’t use an external source to assist them put together their marketing plan 50% said that they would be open to doing so as they felt that someone with the knowledge and experience could add value to their marketing planning.

‘I suppose it’s too easy to get bogged down in the day to day work in a one man practice and my approach to marketing is a bit hit and miss but I do recognize the value of having a marketing plan and would be willing to hire a marketing consultant.’
Sole practitioner

The main marketing strategy used by the most respondents was utilising formal business partnerships (33%) followed by direct referrals from existing clients (28%), while 11% use networking as their primary strategy.

‘We have traditionally gained most of our business from our clients but it got to the stage where we realised that to grow to where we wanted to be we would need to look at other means of growing the business. We had some relationships with local accounting firms and worked towards developing these. This strategy has led to an increase in revenue of 22% each year over the last three years.’
CEO SME Financial Planning group.

‘Although the majority of respondents say they track the effectiveness of their marketing via a range of means, there was a surprisingly wide variation in the sophistication of their processes. While some follow a process where all leads are tracked, monitored and the source identified, then report on results regularly to see what is working and what is a waste of time, others have very little in place.’
Susan Rochester

According to our respondents social media is not a major strategy in their current marketing plans and a number of respondents made comments including ‘Social media is just a lot of noise,’ ‘Social media maybe ok for an on line business but our firm is a people to people business and nothing can replace that’ and ‘My kids use Facebook and I just don’t get it’.

‘We expected to find one or two respondents reporting social media as their main marketing strategy. This was not the case in this sample, although comments indicated that practices are using social media to support other strategies, for example by sharing newsletter articles via social platforms.’
Peter Dawson

However social media wasn’t without some support with one respondent stating that she was open to using social media as ‘it’s all about connectivity and if I can interact with people at a professional level on social media that can only be good for my business’.

The practices that responded to this survey were mostly more than 10 years old (78%), with 17% who had been in business 6-10 years and only 6% for 5 years or less. The majority had fewer than 10 staff (72%) although 28% of respondents were from firms with 21 or more staff.

Concluding remarks

The Slice 3 survey has revealed a strong focus on financial planners developing structured marketing plans and that these are far from static documents as most reviewed their marketing plans on a regular basis. Respondents were focused on building their business by drawing on their relationships with their clients and through formal business relationships. Many are yet to embrace social media as a major part of their marketing plan, although this may change in time as attitudes shift.

For more information about the SLICE survey, contact Peter Dawson directly on 0418 601 245 or email peter@dawsonpartnership.com.au

The post Slice 3 Survey Results appeared first on AdviserVoice.

Peter Dawson

I was reminded recently of how candidates can sabotage themselves in interviews when a financial planner called me to vent about an interview he had attended for a role with a large financial services group.

He came to our conversation with an armoury of incendiary abuse regarding the interviewer’s incompetence, lack of professionalism and inability to recognise his talents.

It wasn’t that he wasn’t a good fit for the role; in fact his skill set and experience put him at the front of the queue of candidates in consideration but his interview went south from an early stage when he thought that there was no appreciation of what he was able to bring to the table. Rather than working with the interviewer he took umbrage to a question about his achievements in a previous role. ‘If he knew anything about me he should have known that I had understated what I did in that role but he started asking a lot of questions he should have known the answer to’.

When I asked him how he thought he came across to the interviewer he missed the point saying that he now knows what he could do to grow the client’s business and didn’t appreciate how his abrasiveness was a likely deal breaker.

Candidates have a number of sabotage techniques they unwittingly draw on to ensure they implode in interviews including the abrasive approach just mentioned. The most common are:

• Lack of focus where answers to questions lack structure and often the candidate will tell a meandering story that loses the interviewer at an early stage of the telling. I know of one case where a practice manager told a story that had no relevance to the question asked and took all of ten minutes to tell it. I’m sure if there was an ejector button the interviewer would have taken considerable pleasure in pressing it.
• Jargon is often used to show case the candidate’s knowledge but often backfires when their responses are heavily littered with industry speak that only serves to negatively impact on their assessment.  This is particularly relevant to interviews where the interviewer is not an industry insider and finds they’re at a loss to understand what you are talking about.
• Waffling is common in interviews particularly where candidates are either unable or uncomfortable in answering a question. They focus on peripheral issues and steer the interviewer away from what was asked in the hope that they can distract them long enough so that they lose their train of thought or that they’ll give up and move to the next question.
• Fidgeting becomes a serious problem when candidates cling on to something like it’s their security blanket and use it as a prop for their answers to questions. I recall a senior financial planner from a private bank who wielded a shiny gold Mont Blanc pen like he was conducting Beethoven’s ninth all through the interview. My distraction grew very quickly in to annoyance and the ‘conductor’ was exited before he could get in to his next symphony.
• Mobile interruptus – here we are looking at someone who thinks that their need to answer their mobile or read and send texts or email is more important than the interview. I remember a business consultant who at the time was working for a global consulting firm spending more time on his mobile than talking to me. Needless to say he didn’t make the candidate short list and the next time I saw him was at a café where he was talking on his mobile while the other person at the table looked on painfully.
• Making inflammatory statements – the most common form of this is bad mouthing former colleagues and bosses or repeating negative rumours about companies. Malicious stories even if there is some truth to them are best avoided with a barge poll as they reflect a lack of professionalism. However sometimes interviewers when probing behavioural characteristics touch on a nerve. A senior executive was once asked what the first thing he would do if he was appointed Prime Minister and he replied that he would order the armed forces to attack one of our Asian neighbours as he thought they were a threat. Needless to say he didn’t get a call back for the role he was interviewing for.
• Telling jokes is the preserve of the fool hardy as we all know comedy is subject to taste and context. I have met only one candidate over the years who was able to effectively weave jokes in to an interview. He really had the talent to pick his audience and his timing was up there with professional comedians and if nothing else he couldn’t help but make you smile even when asked some pretty serious questions.

My advice to you budding comedians is to keep your jokes for another forum as there is nothing that kills an interview like a flat or inappropriate joke.

To avoid sabotaging your chances in an interview aim to build a rapport with the interviewer which is best done by answering what is asked of you directly and succinctly as possible and not taking them on a journey that goes nowhere, is loaded with jargon, distracting jokes or annoying phone calls or texts.

By Peter Dawson, The Dawson Partnership, Author of Successful Recruitment – Building your business through best practice

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Peter Dawson

The threat of people fraudulently representing themselves using creative licence is real and is evidenced in up to one in five resumes including false and misleading information that is designed to get potential employees leap frogging their competition.

This fraudulent activity ranges from lies of omission where dates of unemployment are ‘smoothed out’ of a resume through to including blatant misinformation regarding responsibilities, achievements and academic qualifications.

Where the fraudster has mastered the art of pressing all the hot point buttons at interview drawing on a plethora of fictional stories supporting his claims to be a high performance candidate, you have a potentially lethal cocktail that can lull the employer in to a false sense of security. This vulnerability can lead to a serious lapse in judgement and proper screening processes become compromised. At worst there is cursory attention paid to undertaking due diligence on the candidate and an offer is made when it shouldn’t be.

The high profile case of Andrew Flanagan is telling in that he built a career with an impressive but fraudulent resume securing the role of general manager strategy and business development with Myer and he had also been hired for a senior executive role at Inditex owner of Zara and the recruitment firm Carmichael Fischer. At this level you would have expected that there were stringent screening procedures overseen by experienced professional recruiters who have the ability to weed out potential fraudsters and that those designated by the company to undertake the interviews would have been able to find the chinks in the fraudsters armour. But alas this was not the case and Flanagan went on to join these companies that are now dealing with the issue of reputational damage.

The salutary lesson here is that if a fraudster can trick his way in to major corporates then there are many others who set their sights on less ambitious targets and a position in your business might be one of them. Before you dismiss this case as not being an everyday occurrence you should give some consideration to the bulk of fraudsters who trick up their resumes using information that to the uninitiated may seem valid.

The exaggeration of achievements is a common target for fraudsters and often they will do so to the extent that it will not seem overstated and subject to question. Smoothing dates of unemployment, unfinished courses of study not enrolled for or have not been completed, job titles that have elevated the seniority of a role, professional designations that have not been awarded, professional associations to which there is no membership or where it has lapsed, voluntary work not undertaken and the list goes on.

Fraudsters treat interviews as a challenge and they often prepare themselves as actors readying themselves for the first night of their performance. They rehearse interview questions through Googling a range of websites that carry a wide array of questions including those designed to draw out behavioural characteristics. Additionally, there are a plethora of books and articles that contain detailed guidance as to how best position your-self in interviews with a number advising on how to manipulate the interview process.

Armed and dangerous they are now ready to assail your business but there are measures you can adopt to ensure that you are in the best position to sort out these fraudsters. Your starting point is in the planning of your recruitment strategy where you should give consideration to the resources you will need to undertake the recruitment program. This will include your decision to DIY or engage the services of a professional recruiter. If you decide to DIY then you need to make sure that you have the experience and the time to devote to the recruitment process which will include the search for and screening of relevant candidates over a six to eight week period. Alternatively, if you think you are better suited to working with a recruiter then you need to ensure that they have a track record of placing positions similar to the one you are seeking to fill and that you feel that you can work well with them.

Recruitment is one of the most challenging business activities that you can undertake particularly when you may be faced with fraudsters who are intent on joining your business. If you are unsure as to which option is best suited to you then you might consider drawing on the advice of those who have the experience to provide you with the guidance you need.

Successful Recruitment – Transforming your business through best practice has been written by a former financial services executive who has worked as a recruiter over the last twelve years in conjunction with a senior human resources consultant. The new edition of Successful Recruitment provides you with balanced guidance as to your recruitment choices and includes a range of tips and tools to help you avoid the costly pitfalls including how to conduct interviews and undertake diligent candidate screening.

To help you make the right decisions and avoid the costly pitfalls of recruitment, Successful Recruitment is available on Amazon. 

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The SLICE survey is conducted nationally in March, July and November to canvass the opinions of independent financial planners on a broad range of industry and business issues. The first SLICE survey was conducted by Peter Dawson of The Dawson Partnership and Susan Rochester of Balance at Work in November 2013. Here’s a small sample of the results that survey uncovered:

• 32% of practices increased their headcount in 2013, with 13% expecting the implementation of FOFA would lead to them employing more staff in the future;
• 18% use social media as part of their recruitment process;
• In selecting staff, 21% of respondents always use behavioural profiles and 20% always use knowledge based test.
• Half the practices surveyed increased their training spend in 2013, but 13% spent less on training;
• 23% rated the support they receive from their licensee for recruitment and people management as ‘good’ (16%) or ‘excellent’ (7%). A further 25% rated it as ‘satisfactory.’

The latest SLICE survey, ‘SLICE 2’, has focused on three key areas confronting financial planners:

• Business growth
• Succession planning
• The proposed FOFA amendments

We would like to thank all survey participants who took the time to answer our questions so thoughtfully. You have generously added your voice to a deeper understanding of the issues that affect your profession.

1. Business growth

Sources of revenue growth

The vast majority of respondents (96%) intended to grow their business revenues in 2014. When asked how they will grow their businesses, 65% of respondents stated that their focus is on organic growth. None of the respondents to this survey plan to grow their businesses through buying a book of clients or through acquiring or merging with another practice.

Follow up interviews revealed that most respondents who favoured organic growth did so due to
there being no negative legacy issues that could prove a distraction to the business tying up resources and adding unforseen costs. There was also a concern that there could be ‘client slippage’ and the book could shrink over time reducing the value of the initial investment.

Growth strategies

The dominant growth strategy for those planning to grow their client base is referrals from clients (81%) and centres of influence (71%) while prospecting for new clients outside of referrals accounted for 23%. Almost half (48%) intend to attract more clients through networking. Other ways respondents plan to grow their client base are through social media, seminars, publishing and corporate services.

Staffing for growth

When asked who is responsible for generating business growth in the practice 81% of
respondents stated that the business owners are directly involved in planning for growth in the
business and take a hands-on role in implementing the growth strategy. Only 52% of the
respondents have staff other than the owner(s) with the capacity to bring more revenue into the business.

Given this, it was interesting to note that recruiting another financial planner to help grow their
business is in the plans of 10% of respondents. When they were asked what was most important
to them when hiring 60% selected skills with 20% each indicating attitude or reputation as most
important.

When we asked what respondents considered would be the minimum qualification for a financial planner they would hire, there was a wide variety of responses, with 40% citing DFP as a minimum while others expected the advanced diploma (ADFP), a degree in financial planning or a degree in a related discipline with a DFP (20% each).

‘We are not planning to hire however would accept nothing less than a degree qualification, or worst case, working towards a degree.’ – Survey respondent

Servicing growth

There was a high level of confidence from respondents in their ability to service growth (92%) while 94% were confident that growing the business would lead to increased profitability. Those that didn’t pointed to the need for increased infrastructure that would initially increase costs that would absorb any potential increase in profit.

When asked if respondents will change the ways they operate to increase the potential to increase profitability, 69% stated that they would, with most stating that this wouldn’t require a major overhaul of their business. Scaled advice figured in the plans of 52% of respondents with most adding that they would do so mainly for family and friends of existing full service clients and that this would not be seen as a core part of their business.

‘To grow substantially I need to build capacity by employing an adviser and additional staff. In regional areas the level of skills / knowledge of potential recruits is below the level I need for my business. These potential recruit also believe they are at a level that will attract a remuneration that exceeds their capability to bring in the necessary income. Recruitment of suitably qualified staff is an issue in the regional areas.’  – Survey respondent

Target client demographics

‘The backbone of our practice is small business owners who come to us for their accounting work which gives us a chance to explain the value of our financial planning services. Our strike rate is high in converting our accounting clients to financial planning clients and they then refer business to us.’ – Survey respondent

The four main demographic targets identified by survey respondents were small business owners (68%), retirees (48%), middle income earners (48%) and high net worth clients (35%). See graph.

2. Succession planning

When asked about the current status of their succession planning, only 20% of respondents have a comprehensive plan in place. Of those who had a comprehensive plan, 60% said that they had put it together with the assistance and advice of a business consultant and/or their licensee. In contrast, 30% of respondents haven’t started planning for succession. (See graph.)

Drilling down into existing succession plans revealed that although in 100% of cases a likely
successor had been identified who had the confidence of the business owner in terms of their
ability to run a successful practice, the process was not complete in every case. The table below
show the gaps in terms of other factors, such as valuation methods, finance, timeframes, transition roles and responsibilities and documentation. All these factors are critical to a smooth exit plan.

‘Succession planning is a critical business issue with three business owners who are in their midfifties. We have an agreement in place that allows for a smooth transition as each of us exits the business over the next five to ten years.’ – Survey respondent

3. FOFA reforms

Asking if the proposed changes to FOFA (before the current freeze on those changes) will have a positive impact on business generated a spread of response. Half of the respondents answered ‘yes’ while 28% answered ‘no’. A ‘don’t know’ response was received from the remaining 22%.

‘We have geared our business to the original legislation and the changes will lighten the load in terms of administration and compliance but not to a considerable extent.’ – Survey respondent

Of those respondents expecting the change to have a positive impact on their financial planning practice, 52% stated that the positive effect was due to ending client confusion. Several commented that their clients had seen considerable commentary on television and print media and were unsure what the effect of the proposed amendments would be.

Favourable comments from respondents about the impact of the proposed changes on individual practices included: ‘Increased consumer awareness and ability to understand why we are unique in the marketplace’; ‘It supports our value proposition’ and ‘Highlights differences between the majority of the industry (controlled by institutional product providers) and niche advisory businesses which will focus on client relationships’.

44% of respondents expecting a positive impact on their businesses thought the amendments would end industry confusion while 40% expected they would lead to less administration resources being needed and 32% indicated the amendments will free up business owners time to attend to their clients’ needs.

The responses to a second question about FOFA that asked ‘Do you believe the proposed changes to FOFA will be positive for the public perception of financial planners?’ indicated a wide range of opinions and a level of uncertainty about the likely outcomes.

A total of 48% of respondents said they believe changing FOFA will be positive for the industry while a significant minority (36%) expect the changes to have a negative impact and 16% were not sure. While some believed the public don’t know or care about the changes, several of the comments in the survey expressed frustration with the media handling of proposed amendments.

‘The proposed changes to FoFA will only have a positive impact on the public if/when the media stops being so ignorant about what financial planners do, and how they interact with product providers. The media should also become a little more conversant with legislation as it currently exists. It would be nice to think that financial publications actually vetted their articles for correctness, or where they are too time poor to do that, clearly label them as OPINION ONLY.’ – Survey respondent

Further comments

Respondents were given the opportunity to add some general comments at the end of the survey. Many of these have already been reported above. We also recorded the following:

‘It would be extremely helpful for the development of the financial planning profession if the Industry Super Network would embrace the value professional financial planning can bring as opposed to continuing to demonise commission and virtually all other participants. I live in hope!’ 

and

‘The FPA needs to lift the education level which I feel is too low at this stage before it thinks about being classed as a profession. Also more effort needs to be taken to counter the Industry Super advertising. All they seem to be worried about is increasing member fees and there glossy magazine.’

Respondents to the SLICE 2 survey

Concluding remarks

The SLICE2 survey has revealed that financial planners’ core focus is on building sustainable
growth in their practices derived predominantly from referral business from existing clients. This
is not good news for business brokers as none of the respondents said that they were looking to acquire client books and or buy or merge with other practices.

The FOFA ‘roll-back’ amendments to legislation, proposed prior to the survey then frozen, are
seen as a positive for planning practices with a number of principals stating that the legislation will help differentiate their businesses from institutionally owned businesses.

While there has been a significant push by licensees and practice management consultants to raise awareness for the need for succession planning only 20% had a comprehensive plan. This indicates there is still more work to do although it is encouraging that 26% said that they are in the process of putting a succession plan together.

It will be interesting to see what financial planners tell us as we revisit these issues annually in future surveys.

——–

Peter Dawson is the Director of The Dawson Partnership and Susan Rochester is the Director of balance at Work.

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New SLICE survey: people management strategies in financial advice practices

The second SLICE financial planning survey examines a range of critical issues confronting financial planning practices, topics that challenge practices’ efficiency, profitability and viability.

The SLICE 2 survey provides financial planning practice owners and managers with an opportunity to quickly and easily share their views and insights with their peers, to build an understanding of trends across the sector.

Survey authors, Peter Dawson of The Dawson Partnership and Susan Rochester of Balance at Work, were thrilled with the response to the first SLICE, held in November 2013. Here’s a small sample of the results the survey uncovered:

• 32% of practices increased their headcount in 2013, with 13% expecting the implementation of FOFA would lead to them employing more staff in the future;
• 18% use social media as part of their recruitment process;
• In selecting staff, 21% of respondents always use behavioural profiles and 20% always use knowledge based test.
• Half the practices surveyed increased their training spend in 2013, but 13% spent less on training;
• 23% rated the support they receive from their licensee for recruitment and people management as ‘good’ (16%) or ‘excellent’ (7%). A further 25% rated it as ‘satisfactory’.

The second SLICE survey looks at business growth, succession planning and the impact of the proposed chances to FOFA. The survey takes than 5 minutes to complete.

Click here to complete the survey.

When you complete the survey, you will be able to access a copy of the results of the previous survey.

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5 tips to finding a recruiter to meet your needs.

Recruiters can be a valuable partner in helping you bring the right people in to your business however there are a few things you should keep in mind when considering choosing a recruiter to work with you.

Number 1:

Ensure that the recruiter has a successful track record of recruiting for positions similar to the one that you are seeking to recruit. Recruiters that have this experience will have a strong understanding of the role including responsibilities, expectations of delivery, how the role fits within your firm now and how it may develop in to the future.  Some recruiters concentrate their focus on particular segments of wealth management that are relevant to your business and will readily understand your requirements in terms of candidate experience and cultural fit.

Number 2:

Understand how the recruiter will work with you in the recruitment process as recruiters don’t have a one size fits all business model. They will work with you:

• Exclusively under contract where they will source and screen the best fit candidates presenting you with a short list for interview. With exclusive assignments there are specific parameters to the search including an expected time frame and the fees payable are usually scheduled at specified periods with in the search process. Additionally, the recruiter will manage the candidates through the process and if required handle the negotiations with the preferred candidate.
• Additionally, if things don’t work out with the new employee in the probation period recruiters who work on an exclusive basis will offer a guarantee that includes replacing the employee without you incurring further recruitment costs. However it is worthwhile reading the fine print, as the usual practice is for the guarantee to be contingent on a number of factors excluding your decision to terminate them for reasons other non-performance and breaching company policy.
• Contingently where you will be presented with a number of candidates for your consideration and you only pay the recruiter if you employ one of them. If you do work with a contingent recruiter you should be aware that they often select candidates from a limited talent pool and will circulate their resumes to multiple parties, you being one of them. While you may have interviewed a candidate and made the decision to appoint them, by the time you pick up the phone to the recruiter the candidate may well have accepted an alternative role which means that you are back to square one with a great deal of time and energy wasted.

• Providing an Unbundled service where you decide the extent the recruiter will be involved in the recruitment campaign. You decide which activities that you want to undertake and the recruitment strategy is built around what you want to do and what you want the recruiter to do. This is a consultative fee-for-service approach rather than a fee based on a percentage of the candidate’s remuneration.
• Providing an Advisory service where you are given guidance on the formulation of the recruitment strategy and the most effective means of identifying and harnessing the best fit candidate. This service can take the form of a one-off meeting or alternatively may run for the entire recruitment campaign where the recruiter has a more hands on advisory role and the fees will reflect this.

Number 3:

Make sure that you will be able to work effectively with the recruiter. Recruiting is a challenging business activity and requires significant focus and if you are working with a recruiter you need to feel comfortable with them in much the same way as you do with your clients. This will depend on your personal style and there will be recruiters who you identify with in terms of not only their track record of success but how they present themselves. A successful recruiter who has an impressive track record in placing people relevant to your business is only a good fit for you if you feel you can work with them.

Number 4:

Probe the recruiters you speak to about their businesses and in particular the processes and systems they use. Some recruiters have made large investments in terms of technology and candidate management systems while others work on the back of the envelope and their database is made up of post it notes.

Number 5:

Industry engagement. Professional recruiters involve themselves in the financial services industry through the industry associations and often add their support to initiatives to promote professionalism and career opportunities and advancement for new entrants and those seeking new career opportunities. Industry engaged recruiters are not only participants but often are contributors at industry conferences and will lend their support to workshops and seminars. All this adds up to engagement and commitment to the industry which says a lot about a recruitment firm.

If you keep these five tips in mind when entering in to discussions with recruiters at the very least you will have some guide posts to help you to make a decision that will work for you and your business.

By Peter Dawson, Principal, The Dawson Partnership

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The inaugural SLICE financial planning survey has revealed that only 9% of respondents thought that the introduction of FOFA has negatively impacted on their business growth in terms of staffing and while 25% were unclear of the ramifications of the legislation in follow up discussions most suspected there would be some increase in costs to their businesses but they thought that this will have little or no impact on employee numbers.

25% of respondents expect FOFA to have a positive effect, leading to more employees in their businesses. Others commented that although complying with FOFA requirements will not lead to them hiring more employees, it has meant more work for the existing employees.

14% who responded ‘Other’ focused on the increase in workload within their businesses due to the implementation of FOFA but most indicated that they are looking for this to be undertaken by existing staff. It was thought that this increase while resulting in some cost to their businesses shouldn’t impact on employee numbers. However, one respondent made the comment that ‘costs will increase and productivity will decline’.

In follow up discussions with a number of respondents it was found that those who thought there was no impact or the impact was marginal all had put in place measures to meet the requirements of the legislation well in advance of its enactment. As one business owner said “The industry has had more than adequate time to get ready for FOFA and those that are struggling now should have taken the necessary steps to get their businesses ready”.

Employee numbers

68% of financial planning businesses either maintained or decreased employee numbers in 2013 while 32% increased their headcount. Of those businesses that recruited employees 35% were for replacement positions while 29% were for new positions as a direct result of business growth.

The new positions included traditional financial planning roles plus marketers, business coaches, accountants and lawyers. One business owner commented that although FOFA had little impact in terms of workload, they will be increasing employee numbers due to increased business, including bringing some work they outsourced during the GFC back in house.

Recruitment methods

When it comes to recruiting employees, the overwhelming number of respondents (70%) DIY while 13% use specialist recruiters who have a track record of recruiting for financial planning businesses. 8% draw on an HR resource and 5% on their licensee for support.

Cost was cited as a significant issue with recruiter’s fees being seen as prohibitive. However when asked how much time they had to allocate to the DIY process and the costs associated with that none had costed their time and the cost of the business’s resources in the recruitment process.

As one respondent said “Recruiting staff is something I have to do but I’ve found it frustrating. I start out talking to colleagues and if they don’t have any leads I advertise on SEEK but quite often you get a lot of people applying who haven’t the experience or the skills”.

55% of respondents will call on industry colleagues for leads while 54% use employment websites. 18% draw on social media in their recruitment campaign. When asked how they use social media in follow up discussions most said that they mainly use LinkedIn and to a lesser extent Facebook and that was mainly to check out candidates they were considering rather than sourcing them from these websites.

Financial planners are also becoming more creative in their efforts to find good candidates, including advertising on university websites, working with local high schools and university career services and acting as mentors in formal mentoring programs.

Employee screening

Most financial planners (79%) said they always conduct reference checks. When asked in follow up conversations what kind of checks they conducted 65% said that they conducted a formal reference check with a list of prepared questions with the remainder saying they did informal checks with no or few prepared questions. All said that they always spoke to the previous employer and sixty per cent spoke to the manager that the employee reported directly to.

One respondent commented “I always carry out two reference checks and make sure that I speak to the people that the person reported to as then you know they have had a lot to do with them on a day to day basis and can give you a an accurate view as to their capabilities and performance in their previous roles”.

58% of respondents used behavioural profiling however it depended on the nature of the position in terms of role responsibilities and seniority. 21% always used profiling. One respondent commented “I had a situation where I had two great candidates for a client service role and so I used a profiling assessment. It made the decision so much easier to assess how each would not only be suitable for the role but fit in to our team”.

64% of respondents stated that they didn’t use IQ tests with 27% saying they do but not always and 9% said they always use them.

Knowledge based tests were used by 81% per cent of respondents with 20% stating that they always use them.

Training

When asked about their training budgets 50% said that they had in 2013 increased their budgets while 34% reported no change and thirteen per cent had reduced their budget.

When asked in follow up conversations where the increases were targeted respondents said it was focused on up skilling employees in the use of the client service and administration functions and resourcing compliance.

One respondent commented “Training is an investment in our business. If we aren’t up to scratch on how we service our clients then we’re not doing our jobs. It is also important for our staff to know that we are interested in them getting the most out of their jobs and they are equipped to deliver excellent service to our clients. We run a staff satisfaction survey and every time it comes back with a strong endorsement of staff of our training programs.”

Concluding remarks

Controlling business costs and having a competent team in place were recurring themes that ran through the SLICE Survey.

While there was concern expressed in both the Survey and follow up discussions about an increase (or anticipated increase) in costs with the implementation of FOFA, a significant proportion of respondents stated that they would be able to absorb the workload through their existing staff rather than recruit new employees.

Recruitment was the second area of concern with most businesses preferring to DIY and found going it alone a ‘hit and miss’ experience. However, no one who chose this route had worked out what it cost their business in terms of their time or that of their staff.

Even in this cost sensitive environment there was recognition by businesses that they are reliant on their staff to deliver client outcomes and ensure they are fulfilling their requirements under FOFA and the reported increase in training budgets is a reflection of this.

Respondents to the SLICE survey

71% of respondents are in businesses that have been operating for more than ten years with 11% operating for six to ten years.

77% of respondents are in businesses with up to ten employees with 23% having between six to ten employees and 54% having between one to five employees. 16% of those surveyed were from businesses with more than twenty employees.

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These interviews invariably start off innocuously with the interviewer asking you a range of background questions drawn from your CV. From there they will in disperse straightforward questions with the curve balls. For the uninitiated it can be very disorientating as you wonder what is going be asked next.

Curve ball questions are wide ranging covering an array of topics and often seem out of place in the interview but they are specifically designed to provide an insight in to your values, priorities, motivations and prejudices.

Some examples of curve ball questions are:

• What is your passion in life?
• Who inspires you?
• If you could be another person who would you choose to be?
• If you had a dinner party and you could invite anyone who would you invite?
• If you were the Prime Minister what would you see as your first priority?
• Where would you like to go on holiday and if you could choose anyone to join you who would that be?
• Are you a cat or a dog person?
• What didn’t you like about your last boss?
• Do you think women are discriminated against in the financial services industry?
• Your boss is promoted and someone you don’t like is brought in to replace him/her. What would you do?
• You find out that someone is spreading malicious gossip about you at work what would you do?
• You are offered a promotion a close friend has coveted. What would you do?
• You are commended for a piece of work that was a group effort. Would you say anything?
• Someone has made a snide joke about someone in the office. Would you take it up with the person who made the joke? Or report them to your boss or HR?
• You come up with an innovative business solution and someone else claims it as their idea. What would do?
• Your boss flirts with you and you feel uncomfortable about it. What would you do?
• You have the opportunity for secondment to another business unit that would provide you with invaluable experience but your boss doesn’t want you to go. What do you do?
• You’ve been successful in securing a new job and a week in you hate it. What do you do?
• A recruiter calls you with a great career opportunity but the company you are with has provided you in your career advancement with training, promotions and challenging work. What do you do?
• What is the biggest mistake that you have made and what did you do to rectify it?

These twenty questions are the tip of the ice berg and it is not unknown for interviewers to put a great deal of emphasis on curve ball questions using follow ups to chase down particular motivational or values based issues. However, they can be also problematic for the interviewer unless they have considerable experience in interviewing and understand how the mosaic of questions will illicit responses that will build candidate profiles that they are seeking.

For the candidate it is important that they take a cautious approach particularly when asked questions that they are not comfortable with. Navigating your around some of these questions may also reflect negatively on you as the interviewer might think that you are trying to avoid giving a truthful response.

If you are not sure how to answer a particular question then tell the interviewer explaining your reasoning. If he/she is not able to assist then either tell them that you are not comfortable with the question or answer to the best of your ability without compromising yourself.

Quite often candidates can feel ambushed by curve ball questions and try to outsmart them by making up an answer they think will be viewed positively, however your best course of action is to do what you think is the best thing for you and answer the questions honestly.

As an end note; a candidate was asked the question, ‘if you were the prime minister what would you see as your first priority?’ He answered that he would bomb one of our Asian neighbours and was surprised that he didn’t get the job.

Peter Dawson

Principal

The Dawson Partnership

Author of Successful Recruitment – Transforming your business through best practice

www.dawsonpartnership.com.au

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Of all the threats to wealth management businesses a wrong hiring decision ranks at the front of the queue, as non-performing employees can soon become ‘the enemy within’ causing considerable damage to a company’s client relationships and its brand.

‘Successful Recruitment – Transforming your business through best practice’ is designed to help bullet proof wealth management businesses by arming them with the advice they need to ensure they get their recruiting decisions right.

Written by a veteran industry executive turned head hunter with the assistance of a senior HR consultant, ‘Successful Recruitment’ has over 45 pages of nuts and bolts advice, practical tips and tools designed to ensure businesses are in the best position to hire the best fit employees for their businesses and not the next enemy within.

Everything you need to know is included, from putting together a winning recruitment strategy, targeting and harnessing high performance candidates, getting the best out of social media, the questions you need to ask in interviews to identify the talkers from the walkers and how to beat out the competition when negotiating with ‘your’ candidate.

You can get your FREE copy of Successful Recruitment by clicking here.

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Mastering the recruitment challenge

In parts One and Two,  I discussed how to design and implement an effective recruitment campaign and the resources that you can draw on. In Part Three,  I look at interviewing, referencing, making the offer to the preferred candidate and positioning your business as an employer of choice.

Click on the link to read Mastering the recruitment challenge #1 or Mastering the recruitment challenge #2.

Step Four – The interview
When you are about to proceed to the interview stage you should ensure that you have a structured questionnaire to work from. The most effective questionnaire will not only cover the candidate’s experience but should include a range of behavioural questions that make an allowance for the candidate to describe examples of how they have handled certain challenges, projects or staff management issues in their career.

These questions may be as simple as what did you learn from a mistake that you made? Or tell me a time you had to…

Communication
Recruitment requires a great deal of focus and in a candidate short market you need to be in constant contact with preferred candidates ensuring they are aware about where they are placed in the process and what the next step will be and when it will be. This where all your hard work can come unstuck.

Putting candidates on hold without proper explanation while you attend to other issues can lead to the derailing of the process. Candidates may lose interest as they interpret your lack of communication as reflecting your lack of interest in them or even worse they’re attracted to another role and when you get back to them they’re committed to another opportunity.

Referencing
It is critical that prior to contact being made with any past employer that consent is obtained from the candidate being referenced. Apart from breaching the Privacy Act it could jeopardise the person’s current position and also result in you losing the candidate.

Referencing is a critical component of the recruitment process and falls into three categories:

Verbal reference from past employers
The person undertaking the reference procedure should have a structured list of questions that will canvass a range of performance, cultural fit and job fit issues. There needs to be the ability to ask follow up questions and the person undertaking the reference should ask probing questions that require specific examples. As a guide a reference call should take up to an hour and the person providing the reference should be the candidate’s former manager.

Academic checks with educational institutions
Candidates should be asked to supply academic transcripts and then the educational institution should be approached to ensure the accuracy of the documents supplied.

Federal Police check
Most financial services institutions undertake police checks for their staff particularly those where there is a legal requirement. Police checks are relatively straight forward with on line lodgement with the cost being minimal.

Step Five – The offer
The offer should be discussed with the preferred candidate in detail then a copy of the letter of offer made available to them with the expectation that they will accept or reject the offer in an agreed time frame.

The letter of offer should provide as much detail as possible as to the terms and conditions attached to the role. These include but are not restricted to:

• Remuneration including superannuation, short term and long term incentives and entitlements on termination of employment.  There should be mention of additional entitlements that come with the position including the provision of a car or allowance for the payment of car costs, the payment of health insurance premiums, gym memberships etc.
• Reporting arrangements. While you are the employer this position may report to another senior member of your staff and this should be noted.
• Leave entitlements including sick leave, long service and Parental leave.
• Values and ethical standards that the employee is expected to uphold.
• The handling of confidential information.
• Restraints on the employees activities including not undertaking work for another company.
• Disciplinary action for any breach of company policy.
• Termination/resignation entitlements.

It is advisable to seek professional advice when drafting a letter of offer particularly if you have limited or no experience. The ramifications of including ambiguous or unclear wording or alternatively leaving out critical information can come back to haunt you if you should get into a dispute with an employee over the terms and conditions as were originally agreed between you.

Dealing with candidate negotiations
It is best to conduct discussions with the candidate in person as phone conversations are less personal and may not resolve the points raised as quickly as a meeting in your office. If you have outlined the offer during the interview process then there shouldn’t be too many unresolved issues.

The one issue that is a constant in negotiations is remuneration and this will usually revolve around the candidate seeking a higher base salary and or additional benefits or wanting more in terms of short term incentives. For senior staff there may also be discussion around long term incentives including equity participation in your firm.

If you have an attractive offer then these negotiations should be relatively straight forward unless the candidate has a competing offer that provides them with additional remuneration. Then you have to decide how much you want this candidate or would you be better served going with your second choice candidate if you still have one.

The other issue that arises in negotiations is the counter offer by the candidate’s employer. Candidates often get swayed by the promises of promotion, additional remuneration and other incentives that are only offer as the candidate resigns so it is important that you discuss the possibility of a counter offer with the candidate and if necessary talk them through how to turn it down.

Making your business an employer of choice
Your approach to conducting interviews is a critical ingredient in your success or failure to secure your preferred candidate. Don’t underestimate how important it is for you to present your business in the best possible light drawing out points of cultural differentiation and short and long term benefits.

Increasingly prospective employees are seeking a work culture that:

• is flexible in terms of work environment
• offers career progression
• is committed to training
• offers security of employment
• has strong leadership.

It is important that you are able to articulate the culture of your business and your commitment to staff in terms of work environment and career development as this will be a critical to your success in recruiting the best possible candidate for the role you’re seeking to fill.

Great Place to Work annually compiles a list of the top 50 companies that they rate as the Best Places to Work in Australia. The 2012 list has good representation of small to mid-sized businesses that have demonstrated a strong commitment to engendering a work place culture that position them to be employers of choice.

A final word of advice
If you have little or no experience in recruiting staff it will pay you to consider working with a recruiter or a recruitment adviser as it will not only increase your chances of securing the candidate you are after but will take a lot of stress out of the recruitment process.

http://dawsonpartnership.com.au/

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