Tips for Recruiting Nextgen Talent
M&A continues to dominate the headlines, but the desire to transition a financial advisory practice internally has become much more common. Therefore, the continuity of any financial advisory practice rests largely on the founder’s ability to find and develop a qualified successor(s). Finding new blood can be difficult, especially as many industries are feeling the pinch of a tight labor supply. However, advisors can find and attract valuable talent if they expand their search beyond the industry, craft a compelling message about the value advisors bring to clients and provide the next generation with a defined and easy to follow career progression.
Finding Talent – Look in Unlikely Places
To develop a diverse database of advisors, firms need to look outside of finance and traditional college programs to attract professionals of different backgrounds and heritage. Professionals looking for a second career are especially strong candidates as they can bring maturity, business acumen, and leadership skills to the table. Life changes among these professionals can serve as a catalyst toward a career as a financial advisor. Such was the case for Alisa Nguyen, who became financial advisor after her divorce. As a minority and a woman, she saw the need for financial advice among her friends who were also facing divorce, new careers, and major life changes in middle age.
Nguyen is just one example of advisors coming from unusual places. Efforts by people of color and other minority groups have also helped draw in Nextgen advisors from alternative sectors and diverse backgrounds. Recruiting at inner city colleges, professional organizations, and other centers catering to under served populations also serve as strong recruiting grounds for sourcing passionate people ready to serve clients. Efforts to recruit outside of the industry are aided by a compelling message that draws the connection between the value advisors provide to clients and the values and goals of a diverse group of candidates.
Highlight The Profession’s Value
One of the main drivers of younger professionals is the search for meaningful work. The financial advisor industry provides people with work that is both meaningful on an individual level and that creates a large and positive impact on society. This is true now more than ever as the industry has transitioned to a more comprehensive financial planning approach to serving clients. On the micro level, advisors help clients secure and manage their finances in order to reach personal goals such as buying a house, planning for college, charitable giving, and planning for retirement.
According to Kate Healy, chair for the Foundation of Financial Planning, this message should be at the forefront of recruiting efforts. Women, people of color, and other underrepresented groups are especially attracted to the idea of helping other people like themselves navigate life’s challenges and create financial opportunity through smart planning and investing. Firms looking to attract younger talent should highlight these ancillary benefits of a career as a financial advisor in all of their recruiting materials.
Provide A Path for Career Development
Recruiting is just the first step toward filling the advisor pipeline and hedging against the advisor cliff. Advisory practices need to actively develop their talent pool to ensure Nextgen leaders have the skills, experience, and support needed to both serve clients and lead the practice. These means developing a clear career path for them to follow and pairing it with mentorship opportunities as well as training and development. As Angie Herbers noted in a recent article, “Building a path and a process to advancement can not only instill loyalty but also develop productive advisors who ultimately will help your firm grow.” Training is an investment in the advisor and the firm, and pays dividends in client experience, loyalty, and financial returns to the practice.
Of course, the ultimate career path should result in an ownership stake in the practice. Nextgen Advisors are more committed when they can work toward an equity stake in the practice. This creates a win-win-win situation for everyone. The founding advisor has a trustworthy successor who has been trained and molded to lead the practice in a way that’s in line with their own approach. Nextgen advisors gain the rewards of business ownership including an appreciating asset. Clients enjoy continuity of service and of being part of an ongoing legacy. Bottom line, to attract Nextgen talent, advisors need to be purposeful and creative in how they seek out candidates. Looking beyond the financial advisor industry while crafting a compelling message that appeals to younger works will bring new and diverse professionals into the field. Creating a structured career progression that leads to ownership ensures that talent is properly developed and incentivized to lead and grow the practice. It’s a situation where everyone wins, both advisors and clients, and where the future of the industry is preserved for generations to come.