In my last article, I suggested that as an industry, one of the key opportunities (and one of our existing challenges) is to identify and attract talent people to become financial advisers. Let me be clear, I am not saying that collectively we blindly hire untalented people as a normal course of business, but in looking at “survival rates” for trainees across firms, a one in five (or a one in four or even a one in three) ratio doesn't seem all that appealing over the long term. Some will argue that this is just “the way it is” with sales-focused roles – and I don't disagree. The existing model is predicated on starting with a high volume of candidates and having them exhibit their ability to succeed in relatively short order, quickly eliminating those who can't keep up the pace. So where does the opportunity for improvement lie?
Let's tackle the “identify and attract” components first, and look at them from the perspective of the firm.
We have done a substantial amount of work at our firm around trying to define the skill set, behaviors and “DNA” of the ideal adviser candidate. I have also talked with key contacts at other firms about this exercise. Simply put — it is hard. It is especially hard right now, as the role of the adviser seems to be evolving quite rapidly. Discussions abound about the efficacy of assessments, behavioral interviews and gut instinct as part of the identification process. Words like grit, perseverance, hunger, drive, and resiliency are still used. But a new lexicon is also forming, with terms like collaboration, problem-solving, service and analysis being included. The good news is that these vocabularies are not mutually exclusive, but they do require balance. And while I don't expect anyone to find the perfect combination of skills and behaviors, I am confident that firms will be able to find a permutation that best fits their needs and more importantly, the needs of their clients. The “right” answer may not be that far away.
If we know the genetic code we're searching for, we then need to locate people who have it and have a strategy to get them to consider the opportunity. Again, these are no easy tasks. Historically, successful advisers have come from all walks of life, with varying educational and employment backgrounds. There hasn't seemed to be a single, ideal source of talent. That said, there are avenues we can take to narrow the field, instead of taking a traditional “spray and pray” approach.
There are over 200 colleges and universities with degree or certificate programs in personal financial planning. These institutions could offer us access to a new breed of adviser, if we are open to the idea to a change in our approach. Historically, we enticed people with the prospect of relative independence, high earnings potential and the ability to help clients. Those things still matter, but do they align with what is valued by those who we want and need to serve our clients in the coming decades? Do they align with the realities (both current and future) of our businesses?
The high risk, high potential reward model that exists at many firms may actually be a deterrent for many Next Generation candidates. Arguably, our best candidates will have several career options, so what is the differentiator? Why would the role of the financial adviser be appealing over other choices?
Devin DeStefano works for Wells Fargo Advisors, member SIPC. He can be contacted at (314) 875-8184 or 1 N. Jefferson Ave. 2nd Floor, St. Louis, MO 63103.