It’s no secret that there’s a talent shortage in the independent advisory industry. And this shortage is hitting the smaller advisory firms harder than their larger counterparts.
What’s behind this hiring imbalance? With the competition for young advisors driving up starting salaries, smaller firms with fewer resources find themselves at a significant disadvantage.
To help my smaller client firms compete for the young advisors, I make two recommendations:
First, since smaller firms can’t compete on salaries, they should stop trying.
Bringing new advisors into any firm is not a science; nobody really knows who is going to work out and who isn’t. So, depleting your limited resources on one new advisor just isn’t smart business.
Plus, there are better ways to compete for young talent than throwing money at them.
Do you really want to hire a young advisor whose primary focus is on how much money she/he can earn today? (In an industry whose biggest problems seem to arise from the drive to “earn more money today”?)
As those involved in hiring on a large scale know, the number one reason that people take jobs and/or stay at jobs isn’t the money, it’s the potential. And this seems to be true of today’s crop of younger advisors.
For smaller advisory firms, this is a window of recruiting opportunity.