Recruitment and new financial regulations were on the minds of many participants in a breakout session at SIFMA’s annual meeting in New York this week.
“Financial services is no longer the destination of college graduates,” said Lisa Kidd Hunt, an executive vice president at Charles Schwab. Bad publicity has made it hard to recruit a new crop of advisors, she said.
Schwab is addressing this problem in a couple of ways, according to Hunt. It is partnering with universities in Texas and Virginia to train advisors. It is also hiring interns for summer stints, and then bringing some of those into a three- to five-year investment advisor training program after graduation.
Hunt said that in order to increase the advisor cohort, a process has to be in place to provide new hires with skills.
John Taft, CEO of RBC Wealth Management — USA, freely admitted that not enough was being done either generally or at RBC to bolster advisor ranks. The average age of advisors is 50, he said, and they are being asked about succession plans.
Taft said RBC was now offering promising college graduates two courses in wealth management from which they could move into ready-made jobs.
Kent Christian, president of the financial network at Wells Fargo Advisors, said the firm’s AG Edwards affiliate has an operational training section in which participants follow a curriculum focused on relationship management and teaming. The average age of trainees in the program is 36, he said.
What can the industry do to restore confidence and project a sense of accountability?
“Trust and confidence weigh on everyone,” Hunt said.
Two things were critical to improve this situation, she said. One, to not be in the paper, by which she meant every new scandal further tarnishes the industry’s image. Two, make compliance a top priority, despite the cost.
On a positive note, Taft pointed out that during the financial crisis, clients by and large continued to trust their advisors, even as their confidence in the financial industry plummeted. He said that fiduciaries had an obligation to put clients first, and that advisors should make clients aware of this.
On a similar note, Kim Tillotson Fleming, chairman and CEO of Heffren-Tillotson, said advisors must do a better job articulating their role, and improve their messaging about what they bring to clients.
“Clients want to feel we’re doing something for them, not to them,” Christian said.