The Department of Labor’s Bureau of Labor Statistics predicts personal financial advisor positions will grow by 27 percent over the next 10 years, making it one of the fastest-growing jobs in the nation. All other occupations are expected to grow by just an 11 percent growth rate during that time.
Even with such an optimistic forecast, young professionals and recent college graduates aren’t flocking to the industry. As a result, finding associate advisors to grow your branch will likely be more difficult than you might expect.
But with the right plan in place before you start beating the bushes and some willingness to think outside the traditional recruiting box, you can speed up the process and land ideal additions to your practice.
Know Who You’re Looking For
Hiring an associate advisor without fully thinking through the roles and responsibilities truly needed can be a big misstep in the service provided to your clients and a drain on your financial results. So make time to develop a detailed list of what you’ll expect from your new hire now and in the future.
Once you have a clear understanding of your associate advisor’s role, build a detailed profile of your ideal candidate to use in your sourcing activities. Once the profile is completed, you can start to develop a pool of qualified candidates.
Some commonly used sourcing strategies include: searching social media, employing a human resources firm, recruiting college campuses, traditional recruiting through advertising and networking with professionals, wholesalers and clients. As competition for the already shallow pool of qualified candidates heats up, you may also need to consider some non-traditional recruiting avenues.
From Client to Associate Advisor
In 2007, Richard Stram, managing director of Marino, Stram & Associates in Braintree, Mass., discovered the ideal addition to his firm in one of the last places an advisor might look — sitting right in front of him.
During a consultation, Pam Cunningham, who had been Stram’s client for 20 years, shared she was retiring early from her position as a director with Verizon. In preparation for a new chapter in life, she took an aptitude test that revealed she was suited for a career as a financial advisor.
“It didn’t surprise me,” Stram said. “Anytime we would talk about stock options, deferred capital or 401(k)s, she had all the information highlighted. She’s always been a believer in what we were doing. The only place I could imagine her working was at my firm.”
Stram has also had recent conversations with another long-time client about the possibility of joining his practice as a tax preparer. While he views qualified clients as a possible recruiting source, he also recommends caution before pursuing someone you’ve been advising.
“You have to think carefully,” he said. “You have to consider if they’re a big client and if they’re someone you admire, respect and will fit into your culture. If someone says ‘I want to do what you do,’ I consider that a compliment. If I respect them, why wouldn’t I consider them?”
In addition to clients, Stram said clients’ children and grandchildren who have recently graduated with a degree in finance are another potential source for next-generation advisors. Because many graduates are searching for higher profile careers in financial services, such as investment banking, a branch manager may need to work harder to sell them on the benefits of becoming an independent advisor.
Look Outside the Industry
In addition to being a client, Cunningham also represents another potentially overlooked source for prospective advisors — professionals, particularly women, who are transitioning from one career to another.
Despite studies that show most female clients prefer to work with female advisors, there is a nationwide shortage of women in the financial advisor ranks. A recent study conducted by Cerulli Associates revealed women make up just 14 percent of total advisors and brokers and 28 percent of new advisors entering the industry.
As the demand for female advisors grows, don’t overlook women who are considering an “encore” career outside their original field of expertise. Many already have the basic skills to succeed as an advisor, thanks to their previous experience and training.
Anita O’Conner has been a licensed financial advisor since 1984 and with Cooper McManus Wealth Management in Irvine, Calif., since 2010. But prior to assisting clients with financial needs, she taught educationally handicapped children.
While teaching, O’Connor developed an interest in financial planning, which led her to supplement her already extensive education with courses to become a CERTIFIED FINANCIAL PLANNER™. The two careers may seem worlds apart, but O’Connor said many of her teaching skills have proven beneficial in her role as an advisor.
“It was supposed to be a temporary departure because I loved teaching so much,” O’Connor said. “But I realized the skill set transferred so nicely. You're communicating. You're really a caregiver. It's a service profession, and we first and foremost are caring for our clients. We're analyzing their strengths and weaknesses. We're developing a plan of action for how to reach their objectives. Along the way, we're dealing with all the emotions and the stresses and strains of life.”
It isn’t just women who are taking new career paths into the financial services industry.
Like O’Connor, Howard Slater knows from personal experience that a professional from an outside career field can translate previously acquired skills to build a successful advisory business.
Today, Slater is a principal and partner at Cedar Brook Financial Planners in Cleveland, Ohio. But before becoming an advisor in 1994, he worked for NASA designing highly specialized photographic equipment.
“We have a number of advisors who have come on with no background,” Slater said. “I have one who started in the printing industry, another who was a business consultant in the funeral industry and I’m meeting with a pharmacist who is looking for a second or third career. One woman on our team had a business background in the medical industry and is doing very well.”
With the tenacity to overcome the challenges of building a book of business coupled with the right knowledge and skills, many professionals could already have the tools needed to thrive in a second career as an advisor, Slater said.
“If they have the right skill set of communication, people skills and math, they can be successful in this industry,” he said. “It takes an analytical mind to put together a variety of pieces and communication skills to take complex topics and make them actionable to the consumer.”
No matter where you find your ideal associate, don’t make the mistake of underestimating the time they will need to develop. They often need 10 years of quality experience before they become effective at prospecting and landing new clients that meet the ideal client profile of the practice. But even with the time you’ll need to invest, the benefits can be substantial.
The right associate advisor can help relieve the pressure within a growing branch by ensuring all clients receive the service promised, helping advisors take time away from the practice or growing and sustaining the practice by bringing in new and often younger clients.