Mentoring Your Way to Retirement

By Lydia Sheckels

I have been fortunate to work at a firm that has grown from a very small firm to a large one. When I joined Wescott in 1991, I was one of four professionals, which soon became only two of us, before we built the firm to a staff of more than 50 (and growing). As a firm grows, the leaders shift from having to know how to do everything to training others to assume key roles and become leaders themselves. Mentoring is an essential element of this transition. Not only does mentoring help the firm by improving the skills and capabilities of staff members but it can also create a glide path to the senior advisor’s retirement.

At some point in our career, the years creep up on us, and we realize that the big “R” of retirement is looming — maybe not on a specific date but over a transition period to ensure that our clients are well cared for by a team who has come to know them as well as you do. That’s why mentoring done right is so important.

Using a team approach for client assignments provides new advisors the opportunity to begin a relationship with a client by serving in an associate role while the lead planners continue to nurture the relationship. Over time, if we have been successful, one of the lead advisors can transition off the team, and the associate steps up to a lead role.

Mentoring does not have a set timetable, and it can have various dimensions. It can be a senior advisor sharing what they know about a particular subject matter, being a sounding board or second opinion, or being the coach to take advisors to the next level of their career.

To remain vibrant as an organization, all members of a firm should be either mentors or mentees, and often they are both. Cross-training allows for growth and career advancement. With a well-developed career path, advisors are aware of what needs to be mastered for each milestone and have access to mentors to facilitate the process of advancing within the firm.

As time has passed, my role has evolved to that of relationship manager for clients with whom I have been involved for over 30 years. I have sometimes been the “wisdom keeper” who knows the history and values of the client and can share stories with the next generation in the family and our next generation of advisors. My goal as a mentor is to pass along that wisdom while also leaving room for the associates to develop their own working styles and relationships with our clients.

Mentoring as a Process

Mentoring is a process that includes guidance, storytelling, observing, coaching, and preparing another advisor to assume a leadership role on the team.

There is no script or set way to mentor but having the right attitude is critical to success. The first step is to stop being the person with all the answers. This step may be harder to take than you think it will! I begin this process by resisting the urge to be the first one to respond to a client’s question (in person or online). Instead, I coach the other advisors about what the client is likely to ask and how they can communicate in response. With others on the team taking the lead, try to limit your comments to those that reinforce what was said or clarify any ambiguities.

In meetings, watch for a puzzled look on the client’s face, which might indicate confusion. The junior advisor might not have detected the disconnect but your years of experience tell you that something needs to be clarified. Sometimes, the use of a metaphor can help explain investment terms that the other advisor references in discussing the portfolio. For example, the term “performance attribution” doesn’t resonate with the client until you explain that the process of breaking apart the causes of their return (was it the manager or the asset allocation?) is similar to how they explain the sources of their income (how does it break out in percentages by salary, bonus and investments?).

During this process, it is critical to remember how much we learn by making mistakes. You can’t control every interaction between the junior advisor and the client. In our firm, we engage in a peer review of the work product, which minimizes the risk to the client yet provides a coaching opportunity while the new advisor becomes familiar with the client’s situation.

How to Know You’ve Succeeded

You know that your mentoring has succeeded when the client looks to the other advisor as the “expert” in the room and starts to direct questions to them. This is not a time to feel offended — it is a time to celebrate! I have always wanted the best for our clients, which means that if I am hit by a truck carrying single-malt scotch, I want to be sure that the client continues to feel well-served by our firm and that there will be no gaps in the institutional memory required for that to happen.

A word about technology. Advanced software is great for recordkeeping and efficiency but it’s not a substitute for person-to-person interaction. Salesforce and other client relationship management tools capture many transactional things about a client but these tools can’t capture the essence of who the clients are, how they like to talk about their family at the beginning of the meeting, or that they like to go straight to the numbers. A client’s personality and temperament are hard to master until you have an opportunity to interact with the client personally. This is one of the key reasons we have built our firm around client advisory teams: If one member of the team is unavailable, others know the client and can take over.

When to Leave a Team or Client Relationship

Knowing when it’s time to leave a team and a client relationship that I have nurtured for decades has been one of the hardest things for me personally during the transition to some version of retirement. I imagine that’ll be true for you too, whatever retirement might mean to you.

I have preferred a gradual, multiyear approach. I believe it ensures that the transition appears seamless to the client. As I reflect on it, however, I realize also that perhaps I needed that time to accept that I was no longer needed by the clients with whom I have worked for decades — and that long relationship has not been because the client needed me to remain on the team. Over the years, we develop some close bonds that are hard to leave behind as a personal advisor. It’s not the same as being the last one at a closing business who is left to turn off the lights and lock the door behind them. Many clients become like family to us.

For those who, due to health or other reasons, have an unanticipated transition beyond their control, the client relationship may be in jeopardy unless they have been previously advised about your contingency plan. My view is that successful transitions from the client’s perspective are enhanced with professionals already known by the client. Mentoring can extend beyond your practice to someone whom you hope may either join your firm or be a potential successor.

Final Thought

You don’t have to be preparing for retirement to mentor but it is difficult to retire and retain clients for the firm unless you take the time to mentor others well in advance. As that still unspecified date is approaching for me, I can look back with pride that we have a solid team of advisors who are knowledgeable and highly skilled, care deeply about our clients, and honor the relationship that has been nurtured by those who came before them. There is no better peace of mind for an advisor with deep client connections as they look forward to their next chapter.

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Lydia Sheckels is chief investment officer–emeritus and senior financial advisor for Wescott Financial Advisory Group LLC headquartered in Philadelphia, Penn. Lydia is a past chair of the NAPFA Board of Directors and has been a NAPFA member since 1993.

image credit: istock.com/Baona