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The next generation dilemma: five unique realities faced by heirs

To borrow from an old joke, ask five counselors why they get out of bed in the morning and you’re liable to hear six different answers. Yet most advisors would say that it is all about serving clients by improving their financial lives, while earning a fair salary for themselves. For the next generation of advisors who are in line to receive a book of business from a senior advisor, there is often another reason—that is, to continue to create and shape the legacy they will be left behind, and so on. To do in a way that feels authentic, value-added and completely yours.

I share this insight not only from the perspective of a recruiter, but as a member of a next generation team. When I decided to join Diamond Consultants, a business my mother Mindy Diamond started two decades ago, it was not without panic and anxiety. After all, I was leaving the world of Corporate America behind—a world that actually served me incredibly well when I started my career at Merrill Lynch and Morgan Stanley.

Before making the leap into my family business, I often grappled with a dilemma for the next generation of businessmen. On one hand, I was excited to develop something we had in common and was thrilled to be working with our nearest and dearest. On the other hand, I was concerned about the complex interpersonal dynamics that would be at play. What if our personalities collided in a professional setting? Worse still, what if my performance doesn’t live up to the expectations? What if I fail?

The resulting anger is shared by many of the next generation of mentors we speak with—particularly those moving into the family business.

It’s a blessing to be given the opportunity to one day acquire a book of business, but it also presents a unique set of personal and professional challenges—one that reflects my own experience as a family business member of the next generation. Is.

Here are five common concerns that the next generation of consultants often have and some solutions I’ve learned during my journey:

1. “My approach to the business is very different from that of my senior advisor.”

This is probably the most important and fundamental difference to address for all multi-generational teams. There are many flavors of the same issue. For example: “My dad grew up in a wirehouse, but I have dreams of being an entrepreneur,” or, “My mom was transactional, and we had a rough idea of ​​what it meant to be a financial advisor. I have completely different views.”

The reality is that in the foreseeable future, the senior advisor has the right to continue with their business as they see fit. But as for the next generation heiress, don’t let that scare you. Find your own voice as it will need to grow louder as the senior advisor approaches retirement.

Likewise, learn to embrace the parts you feel comfortable with and work hard to put your own impressions on the things that can be changed.

2. “In the past, our personalities clashed.”

This is more personal than professional, but no less important. The key is to find a healthy level of respect and balance. Personal boundaries are necessary: ​​that is, both parties must understand that a day at the office is not the same as gathering for Thanksgiving dinner, (although some might say that there should be some boundaries for the holidays as well).

An additional strategy I use is to mentally “pull myself out” from any situation that may seem combative. For example, if someone else (not related to blood) had given me the same comment or reaction, would I still have responded as I did?

3. “I’m not sure what it would be like to work with my parents.”

The new power dynamic definitely needs an adjustment period—especially when dealing with a family member or someone with whom you’ve developed a close relationship. Again, it is important to identify the boundaries. For example, while personal conversations are fine from time to time, I find it easier when I don’t have to frequently toggle between wearing a “family” (or friend) hat and a “business” hat. And of course, there’s no “mom” or “dad” talk during the workday for me.

4. “I am ready to take on a significant leadership role, but my senior advisors are not yet ready to give up control.”

Many next-generation advisors struggle to determine the point at which they are no longer needed or want their senior advisor to take a back seat. But what if senior advisors don’t agree with the same timeline?

It is fair and justified to ask for some clarity about the timing. How long does the senior advisor plan to work? Recognize whether they intend to gradually move toward retirement or walk away altogether — and when. In the meantime, find a solution that pleases both parties, especially around roles. Perhaps the junior advisor manages investments and oversees the sourcing of new business, while the senior advisor serves as the relationship manager for existing clients.

5. “What if customers don’t take me seriously? I don’t want to be just some kid who was hired by my father. ,

Especially for the young next generation of mentors, this is a major cause for concern. Still, you might be surprised how little other people care about age—as long as you add value and own your turf. Best solution: Exit confidently and demonstrate potential. While the next generation may have time constraints in business, there is value in having a fresh approach; Plus, bringing new energy to the table and going above and beyond can be a real game-changer for the business as a whole.

While the book has spilled much ink discussing the gift of inheritance, comparatively little has been said about the personal and professional obstacles that come with it. There may be some potential pitfalls for the next generation of financial advisors, but if approached with confidence and flexibility, it can also be extremely rewarding. That is, the joy and satisfaction of creating, promoting and ultimately inheriting a legacy is immeasurable. But no one said it would be easy.

Jason Diamond is the Senior Advisor, Vice President of Diamond Consultants – a nationally recognized recruitment and consulting firm based in Morristown, NJ that focuses on serving financial advisors, independent business owners and financial services firms.

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