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Do You Have the Right Personality for Wealth Management?

More and more, financial advisors seeking greener pastures in private banking and wealth management are having to contend with a variety of evaluation tools beyond the traditional interview drill, including some that measure your personality.

Private banking and wealth management firms are increasingly employing job-specific testing, aptitude tests and "psychometric" or personality profiling-the latter of which is particularly popular among the most profitable independent wealth management organizations.

That's the conclusion of Stephanie Bogan, chief executive officer at Redlands, California-based Quantuvis Consulting, a practice management firm that advises financial advisors and organizations that support them, including broker-dealers, custodians and asset managers.

More firms relying on personality profiling

"Reliance on personality profiling has increased year over year," Bogan told eFinancialCareers, observing that more and more firms are using these tests to gain a clearer understanding of how to match job candidates with the positions to which they're best suited-whether it be client service, financial modeling or marketing, for instance.

Quantuvis- an affiliate of Genworth Wealth Management, Inc.-has the statistics to prove it, having recently published a best practices study focusing on human capital. According to that report, a quarter of the top 25 percent of financial advice firms in the United States, based on owner income, have implemented a formal hiring process, and most top-quartile firms-a notable 56 percent-say they now use psychometric testing to appraise job seekers. (Of roughly 750 advisors responding to this particular study, most were independents, says Bogan, though the sample did include a smattering of wirehouses.)

This can sometimes be troublesome. As one recruiter says, "I see a lot of financial advisors overemphasizing certain tests, mainly the personality and some technical tests, in evaluating a candidate instead of viewing the candidacy as a whole."

Detects whether a candidate's natural tendencies match needs of position

Bogan, on the other hand, looks at the results as a positive development in that profiling should help to detect whether or not an advisor's natural tendencies will "marry up" with the needs of wealth managers looking to hire them. "For example, profiles can tell whether someone has a natural tendency toward communicating and influencing others and if not, maybe a marketing position is not for you."

You might not be predisposed "to go out and rainmake," says Bogan, but you might have an extraordinarily high propensity for servicing clients. Thus, getting the dope on the situation should be beneficial for employers and would-be employees alike, she says.

Other findings of the Quantuvis study:

· Among all advisor firms surveyed, 25 percent of top-quartile firms have instituted a formal hiring practice and 34 percent of other firms surveyed have done so. A total 32 percent of top-quartile firms said their hiring process was informal in nature, while 22 percent of all other advisors surveyed indicated their process was informal though consistent.

· Eleven percent of top-quartile firms and 18 percent of all other firms said their hiring process was handled more through '"instinct and intuition."

· Fifty-six percent of the top 25 percent of advisors based on Quantuvis' methodology used psychometric testing when considering new hires, while 37 percent of all other advisors said they used this testing method.

· Aptitude tests are also popular evaluation tools among the top-quartile advisors, of whom 44 percent are using tests to assess advisors' abilities. Just 19 percent of all other advisors surveyed employ these methods. Finally:

· Job-specific testing is used by 30 percent of top-quartile firms and 30 percent of other firms, while 28 percent of top-quartile advisors and 34 percent of the other firms surveyed use none of these tools whatsoever.

So, what advice does Bogan have for those having to undergo personality profiling? Basically, she says, honesty is the best policy.

The tests are indicators of "style and behavior, and we would never recommend making a decision based on these alone," Bogan says. That said, if you don't fit the criteria or "personality" for a certain type of job, you probably wouldn't want the position to begin with, the CEO concludes.

AUTHORJanet Aschkenasy Insider Comment
  • Ja
    6 October 2011

    I think that personality is a better indicator then a specific course of study or outstanding grades in college. Now don't get me wrong, education is important but a good education doesn't replicate real world experience. The ability to manage expectations and emotions of clients is very valuable in client retention and client confidence in your interpretation of their goals and strategy to reach them.

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