Caleb Brown, Next-Gen Bridge Builder: The 2014 IA 25 Profile

Brown focuses on career changers and students to help firms ‘get it right’ when it comes to the next generation of talent

Brown says, 'We can’t continue as a profession if we continue to lose these quality people.' (Photo: Stan Kaady) Brown says, 'We can’t continue as a profession if we continue to lose these quality people.' (Photo: Stan Kaady)

When Caleb Brown graduated from the Texas Tech financial planning program in 2002, it took him a while to get an advisor to “take a risk” and hire him. After that, he saw a lot of qualified students “who were built to be great financial planners” leave the industry entirely because they couldn’t find a job or the jobs they did get weren’t right.

“I said to myself ever since that point, ‘We can’t continue as a profession if we continue to lose these quality people, so I’m going to try to do everything I can for this not to happen,’” Brown said in an April interview.

Since then, Brown has served on the board of directors for FPA Dallas-Fort Worth, where he implemented a career day program that has been adopted by several other chapters.

“Up until that time, career development meant, ‘We’re going to provide a program for the 55-year-old CFP, business owner, bald-headed guy,’” Brown said. “And I said, ‘We’re not going to do that anymore.’”

Brown started a program that focused on career changers and students, educating them on the career options the financial services industry provides. “Here are the different kinds of firm models, compensation models,” he said. “They don’t get a lot of that in their classes.”

He started New Planner Recruiting in 2009 with Michael Kitces (also an IA 25 honoree this year) and now spends the majority of his time helping firms “get it right” when it comes to bringing in the next generation of talent.

Attracting the next generation isn’t much different from attracting new clients, Brown argues: firms need to differentiate themselves. “When I’m on the phone talking to candidates, I’ve got to have something that I can get them excited about. If they’re any good, they’re going to have two or three different offers. If my client doesn’t have a good story to tell, I’m never going to get the position filled.”

Beyond that, firms need to offer students the opportunity to grow into advisors. “New planners want to have exposure to client meetings, they want to do meaningful work,” Brown said. “They want to make sure they’re heard and their opinions are at least considered,” even if they aren’t implemented.

“The fact of the matter is, the CFP programs are very good, but you’re learning the science of financial planning; you’re not really learning the art,” Brown said. “In our business, unlike law, medicine or accounting, it’s much more art than it is science.”

As advisory firms focus more on career changers and next-gen for talent, Brown expects fewer firms will try to grow their practice by stealing experienced advisors away from competitors. In fact, they’re already abandoning that as a strategy. “Even though hiring someone with very little experience is a time commitment, you at least have a clean slate to work with; it’s going to be a time commitment with an experienced person as well,” Brown said.

Instead, firms are building internal internship programs, sometimes called “residency programs,” Brown said. They understand that finding qualified new hires is difficult in the few months prior to their graduation, so they’re starting to look for them earlier. “It’s like a baseball team,” he said. “Let’s see what our farm team looks like and see if we want to make a hire.”

One strategy that established firms are adopting, according to Brown, is to implement an “emerging wealth division.”

“They’re taking the same approach to developing their new talent to develop their next generation of clients,” Brown said. “Someone who doesn’t have $2 million to manage but who is 30 years old and is going to earn a lot of income, let’s turn them into a good client. When I started the business, the firms out there were not interested in clients like that.”

Brown said he’s seeing career changers from the accounting, engineering, real estate and computer-related fields. They may be making good money there, he said, but “ultimately what it comes down to is it’s not rewarding.”

One challenge for advisors is one that they’ve tried to protect their clients from, Brown said. “Even though we preach all day to our clients that they need to be proactive, we’re reactive with a lot of these business planning actions.”

(Check out Investment Advisor's full IA 25 for 2014 list on ThinkAdvisor.)

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