Creating clear career path critical to attracting NextGen advisers

Fidelity even broadening recruiting efforts to high school students

Mar 19, 2014 @ 12:58 pm

By Trevor Hunnicutt

+ Zoom

Adviser John R. Augenblick learned the hard way that you have to offer a clear career path to the next generation.

As the financial crisis hit, one of his junior employees was poached by a competitor who was willing to offer the young professional a client-facing position immediately, he said.

"We didn't have those kind of formal expectations laid out for him," Mr. Augenblick, 35, said Tuesday on a panel at Fidelity Inside Track, a practice management conference in Washington D.C. "He didn't get clarity from us."

Now Mr. Augenblick, president of Rockwood Wealth Management, offers a clearer trajectory to young hires and potential advisers.

For the first two years, the work is rather basic — creating and editing financial plans and reports. After that, the employee sits for the certified financial planner exam and begins to be introduced to clients. After four years, they can act on their own as an adviser. And after nine years, they will "be assigned rain-making activities, with potential to have equity in the firm," said Mr. Augenblick, whose firm has offices in New Hope, Pa., and Annapolis, Md.

The panel reflected what veterans of similar conferences would recognize as a familiar tableau as Mr. Augenblick and two Fidelity Investments employees took questions from a room full of men with black suits and graying roots, who are looking to recruit younger employees into a rapidly aging industry.

Some advisers asked skeptical questions about the work ethic, interpersonal skills and even the ability of younger employees to keep company secrets. One audience member asked the panel if there was a tendency for younger employees to try to manage their superiors. (Mr. Augenblick said he has seen that problem in the past, but he was able to set the employee straight with a direct conversation.)

The Fidelity representatives, meanwhile, offered insight into its recruitment procedures. The brokerage firm, custodian and asset manager has been shifting its talent development efforts to high schools.

Jylanne Dunne, 54, a senior vice president for practice management and consulting for the custodial unit, said younger students need more education about the possibility for careers with registered investment advisers. Colleges are having a tough time finding students to pursue careers in the RIA space, she said.

"They're looking for more students for you all," Ms. Dunne said of career guidance counselors. "They don't have more students coming in."

Grace Kiem, a manager of college relations for Fidelity, said recruiting the next generation takes a different approach — a mix of social media and just plain social interaction.

"They love informal networking," said Ms. Kiem, 29, who likes the idea of offering "office hours." "We talk a lot about gamification in terms of marketing and branding our company."

Sophisticated marketing might be out of reach for small firms, but Mr. Augenblick uses a more familiar approach to RIAs: referrals. He asks young employees to tell him about top-performing college students that they know. And when considering compensation and career trajectory, Mr. Augenblick takes into account the student-debt level of his prospects.

He said younger employees are adept at advisory firms' notoriously byzantine technology and what he tries to test for in interviews is character.

“You can teach someone financial planning, you can teach someone software, but you cannot teach ethics,” said Mr. Augenblick. “If one underperforming person comes in, it can really affect the demeanor of an entire firm.”

Ms. Kiem said internships are the primary way Fidelity recruits younger employees.

"To stay competitive, you have to offer internships and they have to be very strong, because if they're negative, word will get out," she said.

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