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The idea of what makes a career track in the advisory world is constantly being refined. After all, this is a young industry that is still discovering its best practices. Furthermore, a career track will not and should not look the same in every firm. That being said, there are similarities between firms – particularly large organizations that tend to have a career track similar to the one outlined ahead.

Associate

The associate is the entry‐level position. Associates are also called paraplanners, support advisors, analysts, or junior advisors. Associate responsibilities include gathering financial data; researching funds, products, or stocks at a basic level; drafting financial plans; creating financial models; and managing client data. Associates are often present in meetings but typically do not meet with clients alone. Associates may also have some administrative responsibilities such as completing paperwork, working with clients to make sure documents are signed and delivered, or taking notes and recording them in a CRM (customer relationship management) system. The position reports to a more senior member of the service team, usually a service advisor or lead advisor.

The associate position is defined by the accumulation of technical knowledge. Associates should focus on learning the systems and service methods of the firm (e.g., planning, trading, etc.), acquiring certifications, and completing education programs. Many associates (27 percent, according to the 2015 InvestmentNews survey8) hold a Certified Financial Planner (CFP) designation.

The expectations of the position are defined by the achievement of competency‐based goals. Compensation in independent firms is based on a salary with incentives tied to the performance management system of the firm. The 2015 InvestmentNews survey shows that associates earn a salary between $45,000 and $65,000 and incentive compensation (bonuses) between $4,000 and $10,000.9

Advancement to the next position is based on the associate's ability to demonstrate technical expertise and a good understanding of the service process used by the team. Advancement also signals the ability to work as a member of the service team and a willingness to embrace the efforts and policies of the firm.

Service Advisor

The service advisor is responsible for client service and performs many of the steps in the client process. Responsibilities include preparation of financial plans, analysis of portfolios, and subsequent trading and rebalancing (which may also be done by a separate department). Service advisors answer many client questions pertaining to planning or wealth management, and they are expected to have significant expertise. They work extensively with clients, handling meetings either on their own or together with lead advisors. A service advisor is often called the second chair, to borrow a term from the legal profession. As second chair, they may substitute for the first chair and are generally expected to have a relationship with the client.

The service advisor position is defined by service, meaning the ability to accomplish what the client needs. Through experience, service advisors combine the technical expertise of associates with the ability to communicate with the client. They often supervise their associate colleagues, thus learning how to manage people. It is not unusual to see service advisors handle some relationships as lead advisors. This combination of first and second chair is desirable to see in more experienced service advisors before they are promoted.

This is also the position where training in marketing and business development begins. A service advisor's activities in terms of growth should focus on assisting with the firm's marketing plan. They may also establish themselves in organizations and niches that will later become the center of their new business activities.

The expectations of the position are defined by productivity and the quality of work. Service advisors are often measured on how many relationships they handle and the feedback they receive from clients.

Compensation for service advisors is salary‐based and ranges between $55,000 and $88,000.10 The position receives incentive compensation between $7,000 and $16,000. The wide range of salaries reflects a similarly large range of responsibilities. Professionals at the top of the scale are highly capable of working independently and may have more than a few client relationships where they serve as lead advisor.

Promotion to the next position is driven by the service advisor's proven ability to earn the trust and respect of clients and lead client relationships.

Lead Advisor

The lead advisor is responsible for independently managing client relationships and guiding clients through their wealth management, financial planning, and investment decisions. Lead advisors can also be referred to as senior advisors, wealth managers, or senior planners. These are the professionals to whom clients look for guidance. They may get support from other staff, but lead advisors are the ones who have to answer difficult questions.

Additional job responsibilities include training and developing the service team and cultivating new business. According to the 2016 InvestmentNews Survey, lead advisors are typically asked to add $67,000 or more in new client revenue,11 although, admittedly, only 27 percent of firms set such business development goals. Still, even if the goal is not always quantified, the expectation is there.

The lead advisor position is defined by the word relationships. The ability to communicate and empathize with clients is a critical skill. Success is measured by the number of clients served and the associated revenue. The number of clients lead advisors are expected to serve ranges considerably, depending on the type and size of the firm. My experience has been that in multifamily office firms the number of client relationships per lead advisor may be as low as 15 to 20, whereas in a firm more focused on investment advice the norm can be as high as 120 to 150. Client retention is paramount to the success of the position.

Compensation for lead advisors ranges from $120,000 to $200,000.12 There are also considerable incentives ranging between $14,000 and $43,000 that reflect productivity, individual success, and the achievement of firm results. In addition, it is not uncommon for the firm to pay a separate bonus for business development.

In a few firms, the position may bifurcate into two types of lead advisor: (1) service‐oriented advisors with higher productivity goals and lower business development expectations, and (2) advisors who focus on business development, with higher sales goals and a lower service load. Compensation usually reflects this difference in responsibilities through higher bonuses and lower base salaries for business developers.

Partner

A partner is an owner, but that title does not necessarily describe the associated responsibilities. Very often, the position could be correctly described as a lead advisor; the title partner simply signifies a higher level of success and experience. Not all partners work in client service. Some may work in operations or management. Still, making partner has traditionally been the measuring stick of a career in professional services, and we continue to see it as part of the career progression.

The criteria for making partner include proven productivity, success in business development, commitment to the firm and its values, and personal character. In many firms, business development is what makes the difference between owner and non‐owner advisors. That said, such a decision should be subject to significant discussion. (For more on necessary qualities for partners, see Chapter 11.)

Partners are usually asked to manage and lead. At the least, they should have a strong ability to manage the team they work with and perhaps contribute to the overall development of talent in the firm. Partners should also lead by example, exhibiting the values of the firm to the rest of the professionals. This includes the full range of values that the firm espouses, from expertise and passion for client service to how they treat employees and each other. For example, in a firm that truly believes in a balance between professional ambition and personal life, the partners should be the ones setting an example of how to balance both. Finally, partners often sit on committees and participate in the governance structures in the firm.

Partners in many firms have a compensation structure that takes a dramatic departure from the rest of the employees. It is not uncommon to see silos (i.e., where individuals are paid based primarily on a percentage of the revenue they personally generate). However, independent registered investment advisors (RIAs) are more frequently using a salary‐based method, with salaries ranging from $131,000 to $231,000 according to the 2015 InvestmentNews survey.13 The incentive compensation to partners ranges from $30,000 to $100,000. In addition, partners receive a percentage of the profits of the firm (dividend) corresponding to their ownership of the firm.

Variations and Tenure

The four positions outlined earlier describe the advisory career track in many but not all firms. In general, a career track should reflect the nature and structure of the ideal client service team, and many differences exist between firms. For example, some firms use the descriptor senior at every step to create two levels within the same position. For example, a firm may have “senior associate” and “senior advisor” as steps in the career track. Other firms do not recognize “partner” as a step on the ladder, instead looking at that title as an investment option available to many employees. This is a valid approach. My tendency to put partner as the top step is likely personal bias, having come up in a large public accounting firm.

The lead advisor position is also treated differently across firms. Some firms think of lead advisors as business developers and leave client relationships to service advisors. Other firms give sales responsibilities only to partners. All of these approaches are perfectly valid, but they need to be consistent with the values of the firm. An established career track can ensure the path is fully described and well communicated to professionals at all levels.

Please note that we have not discussed a recommended tenure for these positions. A defined number of years in each position should not be part of a career track. Some people travel up the career ladder quickly while others take more time. Just because someone has survived behind a desk for 15 years does not mean that person should become a partner. Nor should someone who has been in the industry for 20 years automatically become a lead advisor. These decisions should be based on a professional's competency, experience, and track record. Returning to our marathon analogy, slow runners do not get to ride in a car through the last leg of the course so they can finish the race. It might sound brutal, but if everyone makes it to partner, the career track becomes meaningless.