Robo savvy may be the key to newly hired advisers’ success

Newly hired advisers can slowly climb the ranks at their firms by taking advantage of white-labeled robo-advisers.

By using these online investment platforms, new advisers put themselves in front of a client base their bosses and older colleagues may not have, said Neesha Hathi, vice president of Advisor Services Technology Solutions at Charles Schwab & Co.

It may even eventually lead to a solid stake in a firm’s succession plan, she said.

Ms. Hathi sees first-hand how advisers are using Schwab Institutional Intelligent Portfolios, the custodian’s robo-platform. She said young advisers can take the most advantage of these platforms because they can tap into a whole new pool of prospects.

“They’re going to go to their own network,” she said, adding that those clients would likely be similar in age and net worth.

As those clients get older and are in more-complex financial situations, the advisers who picked them up may grow in their careers and firms, as well.

“It allows them to go and grow the business,” she said. “It builds confidence.”

Layton Cox, a 24-year-old financial adviser with Pathways Financial Partners is taking advantage of his tech savviness by pushing the firm forward with its own robo-adviser, My Pathway.

He said he does take notes from watching his peers.

“Instead of only having parents of my friends be prospects, now my friends are prospects,” he said. “I know how they spend money, I see when they swipe their cards.”

He said if he wanted to help everyone he saw and it were the traditional wealth management mentality, he’d be offering free advice, but with a smooth go-to online platform, he has the ability to gather new and young clients.

“Now I can help my friends and get compensated for my skill set I have,” he said. “That’s something unique in bringing a robo-advisory platform to a traditional RIA firm.”

This would be the time for advisory firms to take fresh roles for new advisers more seriously, especially since the industry is expected to shrink significantly.

According to Cerulli Associates Inc., one-third of all financial advisers are planning to retire within the next decade. That means young advisers need to be enticed to stay in the business.

The 2014 Fidelity Recruiting Redefined Study found that for every eight advisers that retire, only three are trained to replace them, and 85% of the hiring decision makers surveyed saw a formidable hiring challenge ahead.

There are three steps firms should take in order to gain new advisers: refocus on different talent pools, perhaps those outside of the traditional finance background; reposition the adviser profession to incorporate more skills and re-engage talent in a new way, by finding new channels to connect with potential employees.

Veteran advisers and firms need to be interested in championing this cause, though.

Mr. Cox said he’s lucky to have a boss who wants to learn the new technology, but some older advisers may question if they really want to take the time out of their already established business to learn a new skill they may not need in the few years upon retirement.

Reverse mentoring can alleviate that stress.

“What our firm has and what I take advantage of are two different things,” said Scot Hanson, a financial adviser at EFS Advisors. He said he often asks himself if there’s anything he’s missing, as well as how much more time he’ll be in the business to pick up these new talents. Having younger advisers around to point him in the right direction for technology matters helps.

He said new advisers and their technology knowledge is invaluable, but they struggle starting out in an industry that prefers big client catches.

“Who will give you money to manage when you’re new?” he said. “It’s not that they’re bad people, but they’re put in a tough position to succeed.”