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Practice Management > Building Your Business > Young Professionals

What's Really Important to New Advisors?

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Putting yourself into the shoes of job candidates might help in hiring and keeping young advisors. Therefore, to find out what’s most important to candidates when taking a job in financial services, and what they see as “red flags,” or deal killers, the research arm of my company conducted a Financial Services Job Candidate Survey. We used Caleb Brown’s firm, New Planner Recruiting, to conduct the research, in which 322 participants answered the survey questions. The results were pretty striking, and should be helpful to advisor firm owners trying to compete for candidates in today’s talent shortage.

To begin, we found that less than 2% of the job-seeking candidates wanted to have anything to do with marketing and sales. Instead, when asked “What areas of financial services interest you the most?” 78% of respondents answered: comprehensive financial planning. That won’t be as surprising when you hear that 64% either have or are eligible for the CFP. Further, those 36% who aren’t CFPs or potential CFPs, still have a primary interest in comprehensive financial planning. That’s quite a testament to the growing popularity of financial planning as a profession. It also puts your firm at a disadvantage in hiring young talent if you aren’t offering it.

While 78% of the respondents want to do comprehensive financial planning, only 51% want to do it directly with clients. Others weren’t so hands on: 21% want to “help clients behind the scenes” and 23% want to “help manage the business” of advice. And though a majority of job candidates want to work with clients, all three tracks are needed to attract talent in today’s marketplace.

Picking The Right Track For the purposes of the professional career track where working directly with clients is most important, the job candidates seem to be less clear about how long the training takes to actually meet with clients. Here’s how they answered: “How long does it take to work with clients on your own?”

• I can work with clients now (51%) • One year: (17%) • Two years: (17%) • Three years: (8%) • More than three years: (8%)

To put these estimates of a financial advisor learning curve into perspective, here’s the level of industry experience of the participants:

• Less than 1 year: (23%) • 1 to 3 years: (26%) • 4 to 6 years: (18%) • More than six years: (33%)

As you can see, 68% of those polled believe they are capable of working with clients within one year. But at the same time, 51% have at least four years’ experience. Put a different way, 93% of job candidates today believe they can work with clients in three years or less. While that may be unrealistic to you, it is their perception, so you can’t ignore it nor squander it when you are recruiting.

To determine what young advisors are looking for in a job today, we asked: “Which of the following [top three] are most important to you?” Here’s how they answered:

• A firm’s culture: 205 (64%) • How clients are being served: 195 (61%) • A career track for advancement: 171 (53%) • Flexibility in work schedule: 143 (44%) • Mentoring opportunities: 86 (27%) • Benefits: 77 (24%) • Incentive Pay: 75 (23%)

Typical new job seekers are more focused on what their time at the office will be like and their career trajectory than the immediate rewards. Therefore, if you have not invested in your culture, outlined your client experience and have a career track for advancement at your firm, you’re not going to win the talent war.

These responses are very good news for today’s smaller advisory firms. While small firms may not be able to compete on pay and benefits with larger firms, a more collegial and supportive smaller staff quickly can make a new employee feel part of the team. And, once again, a firm that focuses on helping young advisors to get where they want to go career-wise can have a substantial recruiting edge.

Many firm owners might scoff at this, believing recruits are most focused on compensation and incentive pay. But when we asked “What level of pay are you seeking?” only 52% of the responses were the current average rate for young advisors at $65,000 per year or higher; 22% of them said a compensation amount lower than $65,000 per year and 18% said “growth opportunities” and “how the clients were served” mattered more than compensation. The candidates (at least 50/50) really do seem to be more interested in other things than how much money they can make.

It’s About The Bennies Also interesting is looking at what benefits were important. Here were their responses to “What [top three] benefits are most important to you?”

• Flexible hours: 170 (53%) • Retirement savings: 138 (43%) • Medical insurance: 136 (42%) • Ability to work remotely: 116 (36%) • Amount of vacation time: 105 (33%) • Other: 9 (3%)

And finally, by way of confirming some of the previous responses, we asked about “The top reason you would leave a job in financial services:”

• I did not like the culture of the firm: 112 (35%) • I did not like how the clients were being served: 106 (33%) • I was not getting paid enough: 63 (20%) • I did not like the lack of training opportunities: 24 (7%) • I did not like the lack of mentorship: 17 (5%)

The answers to the first two questions support the participants’ answers to what’s important: both firm culture and client service were, once again, their biggest concerns. It’s also interesting that training and mentorship seem to have lost some of their earlier importance; they seemed to be good reasons to take a job, but not to leave one.

While we all have our own interpretations, in my experience, the data is on point. Young advisors come to firms for training and growth opportunities and change firms due to lack of culture and client service. I often counsel my client firms to be careful not to make empty promises about training and career paths in the recruitment process because eventually how you handle your culture and the growth of your client service will be revealed.

As for monetary compensation, it’s always a tricky subject. Most young advisors talk a good game about how money is less important, but when you get down to numbers with most people, they often change their tune.

But young financial advisors really do seem to be an exception in this regard. In my experience, today’s young advisors are far more interested in what their working life will be like when they begin a job — more so and or at least at the same level as the starting salary. Consequently, I’ve found firms that focus on their career track for young advisors — including training, mentorship, and eventually, partnership — are far more successful at both attracting, and retaining, young advisors, even during the current talent shortage.

Today’s savvy firms have young advisors both attending client meetings and writing financial plans. They also provide some financial and time support for young advisors to get their CFPs. Further, they should recognize that a flexible working environment is clearly important to today’s job candidates.

Baby boomer or leading-edge GenXer firm owners might be old-school enough to be a clock watcher. My advice is that advisors should get over it. As long as your employees are getting their jobs done at a high level, what do you care where they do it?

Today’s firm owners need to face the reality that younger advisors are not likely to bring in much business. And trying to force them to do it is really not going to help. Instead, focus on a solid, consistent service model to increase your referral rate and let your young advisors just be … advisors.

Angie Herbers is an independent consultant to the advisory industry. She can be reached at [email protected].


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