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Five Strategies for Next-Gen Financial Advisor Recruiting

April 4, 2019

This is the second in a series on the state of advisor staffing and how sales and distribution leaders can get ahead – and stay ahead – of the looming advisor shortage by focusing on effective recruiting strategies. Read part 1 here.

In the best of circumstances, recruiting the best and brightest is a challenge. Add to that an apparent financial advisor talent shortage and the situation can become dire.

The biggest area of concern in the industry right now is getting young talent to join the profession. Cerulli Associates, a leading financial services industry research firm, found that only 27% of advisors today are under 40, with only 5% of those under the age of 30. With their projection that more than 1/3 of advisors will retire in the next 10 years, the future of financial advice starts to look a little precarious.

But the industry as a whole is working to increase the popularity of the profession and there are plenty of steps you can take yourself to secure the right talent (and let’s not forget that the picture may not be as grim as it seems).

Five Strategies for Recruiting Advisors

  1. Leadership must focus on recruiting, retaining and growing advisors. Every aspect of your firm and its unique value proposition needs to be reviewed through the lens of the new recruit. Think about how your firm’s commitment to making its advisors successful is different and clearly articulate it during the recruiting process. Providing access to basic technology, marketing and sales support is table stakes. So what should firms highlight instead? Start with the digital experience for both the client and the advisor. Add to that some ways in which the firm helps advisors build their practice for years to come (e.g., availability of transition and onboarding teams, access to continued education and training, mentorship opportunities, career advancement and options to scale and grow their business). As you make decisions consider: Will this encourage an advisor to join your firm or discourage them? Is this something that will help advisors grow and want to stay with the firm? Your advisors are your best asset; don’t make a decision without considering how it impacts them, even before they join your firm.
  2. Demonstrate the need (and hire) for financial planning and advice across generations. Clearly articulate and define the various opportunities within your firm and the ways advisors at different life stages may be able to help clients. For example, advisors who are starting this profession later in life, or decide they don’t want to retire, may be well suited to advise on retirement income planning and capital distributions. Take a closer look at candidates from CFP Board Board-Registered Programs at select colleges and universities.  Although these individuals may lack the sales experience, they are solid on the fundamentals of financial planning and by pairing a younger and inexperienced advisor with a more senior advisor, firms are in a better position to build a sustainable, multi-generational practice.
  3. Educate Millennial advisors on the value and service they can provide as a financial advisor. Millennials are socially aware, connected and service-oriented. They want a job that gives them personal satisfaction as much as they want a paycheck. Too often job descriptions are vague and at times in the past have been somewhat misleading. This has contributed to the negative stigma around the financial advisor as a “cut-throat salesperson.” When writing your job description, emphasize what a financial advisor at your firm can do for others and society as a whole. If you have a corporate giving or volunteering program, even better. Help them help the world.
  4. Invest in the digital tech stack. Millennial advisors expect the firms courting them to have the most up-to-date technology and strong tech support. No matter the generation, advisors are at heart, “people people”. Greater efficiency means they’ll be able to spend more time with their clients. (We’ll talk more about this in a future post.)
  5. Provide opportunities for training and define a clear growth path. Now is the time to lean in on the industry’s commitment to transparency and double down on strategies and programs to drive organic growth. Traditionally wirehouses served as the breeding grounds for advisor training programs; however, most of these programs were casualties of the financial crisis. We are starting to see a resurgence of Practice Management and Development Programs. For example: Wells Fargo now offers the ability for advisors to apprentice with a senior advisor as part of a two-year program; similarly, Morgan Stanley’s Advisor Associate Program provides a salary to help new recruits get acclimated to the business. Another emerging trend has been the staffing of advisor call centers to supplement a firm’s robo-advisor offering. Bank of America’s Merrill Edge provides investors with a “mashup of robo advisory and human help.” These firms are providing compelling opportunities to compete against RIAs and their rival independent broker-dealers.

Stay tuned for our next post, where we will discuss advisor on-boarding and retention.

Colleen Tuohy

Colleen Tuohy is Principal Industry Consultant at Hearsay, responsible for providing research, strategy, and advisory services to client solution teams. She's passionate about value creation and helping the financial services industry drive meaningful business outcomes through digital transformation and automation.

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