It’s On You to Recruit New Adviser Talent

The managing director of corporate relations for the CFP Board says there are many ways to successfully recruit Millennials and Gen Xers into an advisory practice—what matters most is the effort.

As managing director of corporate relations for the Certified Financial Planner (CFP) Board, Joe Maugeri is often asked to speak about the best approach to attract—and educate and retain—aspiring financial professionals.

In fact, his current position at the CFP Board was developed in part to increase the number of CFP professionals while continuing to strengthen and enhance the organization’s connections within the financial services industry. The new role was created circa May 2014, about three years into Maugeri’s tenure at the organization, and since then the call for advisers to improve recruiting and training techniques has only increased.

Advisers may be feeling a positive sense of momentum for key business metrics heading into 2016, but the industry is still not in the clear from a recruiting, business-succession-planning and talent-pipeline perspective, Maugeri agrees. At a very high level, the strategies that seem to work best for attracting Millennials and others who might be less interested in a financial services career involve toning down the sales aspects of the job—at least at first. Some functions of the advisory industry will always be built primarily around sales functions and earning commissions, but these are not the only pathways one can pursue, and often they become more attractive only after an individual moves along in his advisory career.

For such reasons, Maugeri suggests new talent be presented with a clear career path that sets expectations and goals for the first year, or even the first two years, of the new adviser’s career. This time is probably better spent training the new employee on things such as portfolio building processes, client reporting and business structure—rather than putting the focus on sales and production from the start. All firms would like to hire someone who can immediately come in and start producing loads of new business, but often it’s just not the reality.

 NEXT: High income potential matters, too

“Financial advisers, especially those committed to high standards of client care and fiduciary prudence, are uniquely qualified to help individuals improve their lives,” Maugeri adds. “You can pull all their finances together, solve financial problems and make a plan to achieve their financial goals.”

This is a compelling message among those completing college degrees and looking to make a career choice, he says. Of course, it does not hurt a firm’s prospecting ability to be able to talk about the very high income potential associated with financial services careers. Besides this, it’s a “dynamic, respected profession,” as Maugeri puts it, that plays an important role in the global and national economy.

Maugeri suggests that it is often surprising for those trying to recruit new advisory talent just how much the choices of language and presentation matter—a point of view backed up by substantial industry research.

For example, according to Fidelity Investments, only two out of 10 college students and young professionals surveyed for its most recent “Recruiting Redefined” study said they were familiar with the adviser profession, and more than six in 10 could not name a single firm that employs advisers. Yet, after learning some basic facts about the industry, nearly half of the young people surveyed said they would consider a career as a financial adviser.

This is good news for advisory firms, considering that a substantial portion of the advisory work force is nearing the end of their working lives. Cerulli Associates pins the figure at four in 10 advisers being either at or approaching retirement age. Perhaps more informative, the average age of financial advisers is just under 51 years, with nearly one-third of all advisers falling into the 55 to 64 range.

“The numbers are very telling when mapped against the fact that demand for advisory services and the underlying career path is expected to grow substantially in the next five years,” Maugeri says.

NEXT: Finding the right path  

Plugging for his own organization and other providers of adviser education and standard-setting, Maugeri notes that financial professionals consistently report an increase in average annual gross earnings after receiving their CFP certification. This is an attractive prospect to those entering the work force, young people who thirst for opportunities to be rewarded for hard work and for setting themselves apart from their peers, he says.

“We encourage firms, when they’re hiring people out of school, to seek out the formal financial planning programs,” he adds. “Just the CFP Board has more than 220 schools currently that we partner with to provide financial planning education. It puts the students through a rigorous program that touches on all the key areas of advising and financial planning. These folks can really hit the ground running if you support them the right way.”

One additional piece of advice: “Firms that actually show potential recruits all the information upfront, in terms of how they’re going to prepare you and train you for this career, have much better success and retention. It’s about sending the message that the firm is willing to invest in you, the new adviser.”

This last point is critical, Maugeri says, because, in the coming years, recruiting pressures will heat up substantially. “So chances are you won’t be the only one going for a strong potential recruit,” he concludes. “You’re going to have to have a compelling message about why the individual should come to work for you, because they’re going to have a choice.”