If you want an idea of how to help and support the next generation of advisors, look no further than the medical profession. Sure, it’s more about modern portfolio theory than appendicitis, but few would ever argue that medical students should hit the phones and begin cold calling immediately upon graduating. While medical residents are learning to save lives and comfort the afflicted, how is ensuring a client’s financial solvency well into retirement any less important?
It’s a question Craig Pfeiffer has asked and answered. The CEO of Advisors Ahead, a firm dedicated to the successful development of financial advisors and that counts such industry notables as Texas Tech associate professor Deena Katz among the staff, looked specifically to the type of training young doctors receive right out of medical school when he founded the company—internships, residency programs and all.
Pfeiffer is a former wirehouse guy, but recognizes that the problem of career support (or lack thereof), which results in high washout rates, doesn’t discriminate by distribution channel. He spent 29 years with Morgan Stanley Smith Barney and “predecessor firms.” He left Morgan Stanley in October 2011, where he was vice chairman and a member of the executive committee, to devote himself to career development and support full-time.
“I started off as a retail stock broker and went through every evolution from 1980 until now,” Pfeiffer said. “Throughout that time I was an advisor, a branch manager, a regional director and had a hand in all those other various roles, in addition to playing the role of a corporate executive and, ultimately, vice chairman.”
Over that time, the human capital, training and professional development departments all reported to him, which resulted in what he calls “a late career mission;” one that is threefold. The first is advocacy; the second is training and support for the next generation; and the third is the practical application of that training.
“That’s the charge,” he added. “At its core, it is rooted in a pretty big gap around a need for more financial advisors and new financial advisors.”
The traditional entry point for financial advisors, he explained, has been people experiencing a career change starting at age 30 to 40. They’re typically looking for a high degree of autonomy, ideally building a book of business as a sole practitioner.
“It’s a sink-or-swim strategy, and most people have sunk, not swum,” he observed. “At the same time, there’s a university population that is not as attracted to the investment banking track or sales and training track. But now there’s an emergence around an interest in becoming a financial advisor, motivated mainly by the perpetuation of the CFP designation, as well as some others.”
A university population looking for jobs and an industry that needs the people—might there be a fit, he rhetorically asked?
“But they’re not set up to onboard them in the traditional model, so we need a new model.”
That model is the aforementioned medical profession, and it stacks up pretty well with what the financial advice industry is looking to achieve.
“You take medical students, and you don’t let them become doctors right away,” Pfeiffer said. “They spend time as a resident. Law students don’t become lawyers right away; they spend time as associates. Even teachers don’t become teachers right away; they spend time as student teachers. But there’s not been a natural bridge for advisors, so that’s what we’re trying to build. We’re creating the curriculum and infrastructure with firms to onboard college graduates as future financial advisors in a residency model.”
More specifically, it’s a combination of distance learning and practical in-field experience with three dimensions (see sidebar, “How It Works“). The first dimension is called “The Advisors Ahead Preparatory Program,” which is a distance-learning model for college sophomores, juniors and seniors who have declared an interest in becoming a financial planner or advisor.