G2: Building the Next Generation. Palaveev Philip

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.