Fram places people into a variety of roles, but most have an investment and client facing focus and often these roles come with a sales target attached. Relationship Managers in a private bank are essentially salespeople, who are tasked with gathering AuM, receiving referrals, and building their network of introducers. Investment Managers often have net new money targets, and in sales for an asset manager there is no doubt what your role is. Indeed even researchers play their part in sales through attending client meetings and explaining difficult concepts in a coherent manner. With many firms having little or no natural flow of new business, hiring the right people can often be the difference to growing a business or not.
It’s essential that timescales are discussed and agreed
When hiring most firms accept that there will be a period where the firm is making a considerable investment in their staff with little or no return, before this individual starts contributing. Most expect there to be an initial period of investment into a new hire before they start to generate revenue, and then hopefully become profitable. Most people seem to agree that if a Private Banker breaks even in year one then they have done well, that an institutional fund salesperson may not make a positive contribution for up to two years, and that an IFA may take in excess for a year to transfer their book to a new employer. It is essential when hiring that these timescales are discussed and agreed, and are most importantly realistic. What we have seen over the last few years is firms agreeing to a timescale, but perhaps losing their nerve a little as they see money going out of the door during the early stages of the appointee’s P&L “j-curve”. Timescales become shorter, or pressure is put on the individual to deliver quicker, which leads to the individual feeling insecure and rather than opening up their contact book they hold off speaking to old clients in fear that they won’t be there in a few months to service them.
Too much staff churn can reduce your chances of being successful
Recently we met with the owner of a very successful wealth management business, and asked him why his staff seemed able to write large amounts of business and his response was very simple ‘me and my team have been here a long time’. It was obvious when talking to this very successful individual that he thought that too much staff churn can reduce your chances of being successful, that constantly investing money in new people for only short periods was a costly and futile exercise for all.
The first 12 months can be really hard work
It’s not just employers who need to stick to the timescales agreed, but employees to. If a business plan has been agreed then it needs to be delivered on, and this means that the first 12 months in a new job can be really hard work. In order to get momentum the effort needs to be front loaded and this can mean lots of phone calls, meetings, and late nights. We often discuss this in some depth with people who are considering a new role and warn them not to move unless they are prepared to go through this hard initial period.
Sales is a hard business and has been particularly hard over the last few years, and whilst business manuals will often advocate cutting staff immediately you feel they aren’t quite performing our experience shows that it is often a good idea to give them a bit longer and make them feel secure to reap the rewards of your investment.
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