When Joining the Advisory Industry Is a Natural Fit

Aspiring certified financial planner explains what can draw Millennials and other untapped but skilled talent pools to the advisory industry. 

For the majority of people, says Chad McPherson, an adviser-in-training with Payne Wealth Partners in Evansville, Indiana, views around money and investing relate directly back to principles first learned when growing up.

McPherson’s official title is “paraplanner,” as he is still pretty new to the advisory industry. Having passed the Certified Financial Planner (CFP) certification program in July, he is now working to complete mentorship duties under an experienced team of financial advisers. This gives McPherson an inside perspective on what firms should know about attracting Millennial and Gen X job applicants—and what it’s like to first join up with an advisory.

Cutting straight to the chase, McPherson says he was hired at least in part because firm leadership at Payne Wealth Partners is “rightfully focused on adviser recruitment and business continuity planning” amid accelerated Baby Boomer retirements. His strong work ethic and enthusiasm for the CFP certification also helped, he says, but recruitment is quickly becoming a serious focal point across the advisory space. It’s especially pressing in the independent registered investment adviser (RIA) space, wherein relatively few independent firms have true succession plans in place.

Add to the natural demographic pressures regulators’ increased interest in advisory firm succession, and firm leaders must take action today to groom the next generation of talent, McPherson says. He warns, however, that recruiters will not have as easy a time picking out younger talent as they might hope or expect. A big part of the problem is that even students in finance-related majors get very little exposure to the advising career path before graduation. Others find themselves in the wrong part of the finance industry straight out of school, as was the case with McPherson, whom earned an undergraduate financial management degree from Western Kentucky University.

“I ended up selling insurance for about a year out of school,” McPherson explains. “It’s a fine career path and I have many friends who are still working in insurance, but wholesaling is not for everyone. It’s a different mindset and a different path forward from what you can find in relationship-based financial advising.”

NEXT: It takes a certain mindset 

“Frankly not all that many young people are very aware of the advisory industry or thinking about it as a career path,” McPherson adds, citing a variety of industry research reports arguing the same. For example Cerulli Associates recently found current trends will start driving down the total number of advisers by 2019, unless recruiting among young people seriously picks up. At the same time other research suggests demand for advisory services will easily grow 40% or more in the next few years, further crunching the time of the existing pool of advisers.

McPherson pretty quickly came to realize there were opportunities out there for a better fit, and that only focusing on selling insurance products would “really limit the impact I had on individuals,” he says. He returned to college in hopes of earning the CFP certification, “and sought to work for a company that supported continuing education for their employees as well as holding themselves to a fiduciary standard.”

Thinking back, he suggests something else that really prepared him to be interested in an advisory career was watching family members operate a number of small businesses. He says he watched members of his family struggle as plans for their retirement were crippled by a slowing local economy. Firsthand, he “witnessed the side effects of fully devoting all your eggs to one basket, as much of their retirement hopes depended on the success of their businesses.”

“People work hard all their lives, but they don’t plan for their retirement,” he continues. “I have seen too many struggling to make it on Social Security when what they should be doing is enjoying the fruits of their labors.”

In this sense, McPherson agrees that advisory firms will do best to find candidates not just with the right financial skill sets, but with the right philosophy about money, life and work. It’s not exactly a simple task and there is not really any one specific formula for finding these people, he notes, but the effort will pay dividends.

NEXT: Succession planning is client planning 

McPherson says he eventually accepted a position at Payne Wealth Partners because “the firm very clearly signaled its willingness and interest in helping me develop my financial knowledge.”

“I love that everyone gets to bring something to the table and has their own area of expertise,” he adds. “Also, as a young professional, it is very rewarding to interact on a daily basis with people who have a so many years of experience in the industry. I feel like I learn something new every day.”

Another interesting piece of advice he likes to share was given to him early on: “When I was beginning my search for a career in the financial services industry, a wise individual told me ‘you want to work with a team that operates as a business and not as a lifestyle firm.’ This is a statement that was not only applicable to my situation, but also a consideration that should be posed by every consumer to his or her adviser. After all, what does happen to all of the planning you’ve put into your financial future if your adviser simply exits the business tomorrow?”

McPherson concludes that, from the client’s perspective, it should be evident that if their current adviser leaves the business tomorrow, there are other qualified team members in place that can easily step in and help make the financial decisions that loom unexpectedly.

“Ideally, you should want the opportunity to have relationships with multiple advisers, young and old, on the team,” he adds. “This assures that someone will be there to support your decisions throughout your financial life.”