I'll never forget the line that prompted me to become a financial adviser: “You'd be an idiot if you don't do this.”
That blunt statement, made by Blair McCarthy, the adviser who had been recruiting me to join his firm, really got my attention. Until that point eight years ago, I had been waffling about whether to continue my successful mortgage brokerage career or accept Blair's invitation to jump into the financial advisory field.
Being a financial adviser has proven more rewarding than I could have imagined. I have a significantly higher income than I did as a mortgage broker, and I'm doing very meaningful work for our clients. What's more, I now own 50% of our firm, and I'm not yet 30.
I've done a lot of reflecting lately on the industry's well-documented difficulties in attracting young advisers. And I have to say that I'm not one bit surprised. Based on my experience, the odds of a smart, hardworking young person ending up as an adviser are pretty darn low.
Before meeting Blair, it had never occurred to me to become an adviser. In fact, I had only the vaguest idea of what a financial adviser did. In my mind it consisted of cold-calling strangers to hawk hot stocks — not a scenario I found particularly inspiring.
Had I not happened to cross paths with a veteran adviser who went out of his way to educate and recruit me — and offer me a path to equity ownership in his firm — I'd probably still be in the mortgage business.
One attractive feature of the advice business was financial stability — our firm is fee-based and thus not subject to the ups and downs of commission-based work. Most importantly, Blair laid out a career path. He made it clear that I would have to earn it, but if I worked my butt off, there was the potential of becoming an owner of the firm. The story had played out exactly as he promised, and looking back, he was right — I would have been an idiot if I hadn't taken the leap.
Unfortunately, the financial advisory field doesn't have enough Blairs in it. As a whole, the industry isn't adequately explaining to a young audience what it does and why it's worth being a part of. It seldom shows would-be advisers a path to equity. The industry should be shaking the next generation by the shoulders and driving home the opportunity it has, but that's not happening.
And given the fragmented nature of the business, I don't expect things will change. Recruiting the next generation of advisers is a challenge that each firm will have to face up to by itself. That includes my firm: As we grow, I am helping to recruit advisers and I have to admit, the experience is perplexing at times.
In a period where there's still a lot of economic uncertainty, you would think a solid starting salary, benefits, job security and a career path would be extremely appealing. Yet it's been difficult to find candidates that even take the interview process seriously. If a candidate can't make it to a meeting with his potential employer on time, I'm certainly not going to trust him or her to work with our clients.
Yet a dearth of qualified applicants is only more reason to be ready when the right candidate does appear. At my firm, we are committed to training, mentoring and providing a career path that could lead to a share of ownership.
I know giving up ownership is a tough pill to swallow for many advisers. Having built their practice with years of blood, sweat and tears, I'm sure it's very natural to want to hold on. However, limiting young advisers' opportunities makes it difficult to attract talent. And the inability to recruit seals off the possibility of internal succession, which sets your clients up for an abrupt transition when you retire.
Most young people want the opportunity to earn a stake in our firms. The smart, dedicated, hard workers are worth it, and they understand this very well. Think of the job market from their perspective: If they're expected to work 60 hours or more per week for an entry-level salary, then they'll set their sights not on an advisory firm but on a tech company, where they can feel hip, earn a competitive starting salary and scoop up stock options.
If we expect today's youth to roll up their sleeves and help build our businesses, we've got to meet them halfway. That means explaining what we do, mentoring and providing the opportunity for enfranchisement. I'm proof that this approach works.
Bijan Golkar is a certified financial planner and licensed tax preparer with FPC Investment Advisory Inc. in the San Francisco Bay Area.