Advisory firms seek to retain older advisers

Facing a shortage of young planners, some advisory firms are coming up with creative ways to retain older financial advisers.

Some of the perks being offered include flexible work hours, the chance to telecommute and lighter workloads.

One firm that has tackled the retention issue is Harman Wealth Management in Woodland, Texas. Its founder, Dean Harman, recently bought Houston-based Estate Resources Inc. and wanted to keep Jim Osborne, the firm’s 69-year-old principal, on board.

While terms of the acquisition required Mr. Osborne to stay for at least a year, he agreed to stay longer — provided that Mr. Harman permitted a flexible work schedule.

Today, thanks to an investment by Mr. Harman in BlackBerrys and servers, Mr. Osborne is able to work from home. He is also able to indulge his passion for golf as often as he wants.

“I think it’s very important from a client relations standpoint to maintain that consistency,” said Mr. Harman, 39, whose firm manages $80 million in assets. “If it was an atmosphere where [Mr. Osborne] had to get in at 8 a.m. and leave at 5 p.m., that just wouldn’t work for his lifestyle.”

DEARTH OF YOUNG ADVISERS

The move to retain older advisers comes as the financial advice industry faces a severe shortage of young planners.

Just 3% of the nation’s 245,831 advisers are 35 or younger, according to a recent report by Cerulli Associates Inc. in Boston (InvestmentNews, Jan. 21).

“People are becoming more open to it,” Scott Smith, a senior analyst at Cerulli, said about efforts to persuade older workers to stay on. “The entire work force issue for advisers is coming to the forefront.”

“Ours is a very difficult business for young people to break into,” Mr. Harman said.

Attracting the next generation of advisers was recently cited by Mark Johannessen, president of the Denver-based Financial Planning Association, as the biggest challenge facing the advice industry (InvestmentNews, Jan. 28).

Jim Pearman, founder and principal of Roanoke, Va.-based Fee-Only Financial Planning LC, is already bracing for the time two years from now when his longtime paraplanner and office manager reaches retirement age.

“We’re trying to make it attractive for her to continue to be involved,” said Mr. Pearman, whose firm manages almost $300 million in assets.

Among options being considered, he said, are reassigning some of her duties to allow her more time in front of clients.

“She’s really good with them,” he said.

At Fairfax, Va.-based CJM Wealth Advisors, five of the firm’s 25 financial planners are near — or past — retirement age and are working flexible hours, said David Greene, the firm’s vice president.

CJM, which manages more than $400 million in assets, prefers to keep its efforts to retain older workers informal.

“We don’t have a specific plan,” Mr. Greene said. “It’s just, ‘Let’s work it out.’”

Retaining older employees helps create a positive working atmosphere, Mr. Greene said.

“They’re valuable employees,” he added.

For advisers who don’t want to continue working at their firms well into their golden years, it is important to develop a plan that makes their transition out of the firm as smooth as possible. That plan should be mapped out at least three years before the employee intends to stop working, Mr. Harman said.

“When firms have an adviser retire without much notice, it leaves everybody in the lurch,” he said.

Andrew Coen can be reached at [email protected].