With the average age of financial advisors now well over 50, the financial advisory industry needs young professionals.

Thankfully, many financial advisory firms have moved away from the sink-or-swim methods that often proved detrimental to emerging talent. More and more, firms have adopted a team approach. This change in philosophy has transformed the way new employees are trained, developed and retained.

While there are clear benefits to teaming, the wrong approach can yield mixed results. Identifying and developing an employee’s talents and strengths and helping them prosper are more important than forcing them to adapt to an existing system.

A shift to training, mentorship
Traditionally, the process of welcoming new employees to financial advisory firms as been far from ideal. Advisors, who were just starting out, after a little training, were often required to search for new business on their own. Not surprisingly, the failure rate was usually extremely high. Some wirehouse branch managers have suggested that using these kinds of onboarding tactics, less than 10% of new FAs lasted longer than two years.

New methods
Today, many firms are trying new methods of developing and retaining talent, utilizing a combination of training and mentorship. For example, some firms place new advisors with veterans as soon as they arrive. Under this arrangement, new associates can ask questions and learn strategies they can model in their own work. Veteran accounts often have a built-in network and a “book of business” that can be mined on smaller or less active accounts. This arrangement can also help new FAs learn to conduct effective client meetings and construct portfolios before moving to higher-level tasks over time.

The team model leads to a more collaborative environment. Clients like knowing that, besides their advisor, there are other professionals working on their behalf. In fact, some advisors of high net worth clients set meetings with every team member at a financial advisory firm as part of the client intake process. This way, the client can understand how each person will contribute to his or her experience.

Things to remember

For more information on investment strategies and practice management, visit durableportfolios.com.


This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed above may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted.

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