Approach retention of PYs like you would clients

While there are a number of reasons an advice firm may choose not to employ professional year (PY) advisers, one of the more common concerns noted by advisers is that the PY will leave and their invested time and money will be wasted.

However, industry academic and consultant Dr Katherine Hunt said that firms should be taking care to foster a connection between a PY and the business, much like they would with a client.

“Imagine that, instead of an awesome young, recently graduated PY or recently qualified PY, instead of that, it was a client. Imagine. You might worry, ‘Oh, my clients might leave me and go to someone who’s a little bit cheaper down the road. How can I keep them?’” Hunt said on The ifa Show.

“All those 10 answers that just popped straight into your head right now, probably none of them were financial and you would do that to keep your clients.

“All of those beautiful things; communicate really well and make sure you talk to them about their kids and grandkids and look for ways to add extra value over and above just financial advice and, you know, give them a hug.”

Much like advisers make a conscious effort to ensure clients feel that their relationship is about much more than fees, Hunt said that firms should be working to create an environment for PY advisers that they will value more than the possibility of a higher salary.

“Similarly, with a PY, if there’s any kind of hesitation that they might leave, then I think that’s, I don’t want to be making anyone feel uncomfortable here, but there might be a good opportunity to reflect on how we’re crafting a context for those people to thrive and stick with us,” she said.

“So, it might be that maybe our communication could be reinforced so that our communication, even with our team, is so strong that our team feels like, ‘Wow, they have done so much for me. I’m here regardless because they’re great people and they’re exactly who I want to be around’.”

Furthermore, Hunt suggested that firms should also consider structural changes that would solidify a PY’s position there, anchoring them without making them feel stuck.

“We have, in financial advice for example, most firms that really do thrive have an annual retainer type fee model … and it works because clients are accustomed to ‘Oh, this is just a yearly thing. We’re here now, this is normal’,” she said.

“When it comes to staff, I think it might look like embedding them a little bit more formally into the business.

“Maybe a concrete plan for some kind of equity system or whatever that might look like for that individual so that the friction, shall we say, for them leaving is enough that, if they’re not happy, that they feel like they can easily go, but also enough friction that they’ll also work on communication or whatever is the issue from their end and stick it out and try and find themselves a full career in a business.”

Speaking with ifa last year, Bryce Wild, a private wealth adviser at Integro, explained how becoming an equity partner with the Perth-based firm made him feel more secure in his position in not only the firm, but also within the wider profession itself.

“It’s always been a career goal of mine to be able to have an equity stake in the business that I work in and to play a more meaningful role. Taking ownership of where you’re working and having more of a say definitely makes it more meaningful,” Wild said at the time.

“I’m really happy about the equity position, and I feel like it’s going to solidify my place at Integro and in the industry and will give me an opportunity to have more influence on the direction and the growth of the business.”

To hear more from Katherine Hunt, tune in here.