The future of new-adviser training is now

The diversity of new advisers entering the industry adds to the challenge of getting them up to speed

Oct 26, 2018 @ 10:26 am

By Joni Youngwirth

One of the issues I hear about frequently these days is how to train new advisers. Training takes up valuable time, and most advisers would agree that it's not their forte. Many tenured advisers learned how to function in this industry at a wirehouse or through on-the-job training. But today's new advisers want a more structured curriculum.

The challenge

Hiring firms often look for someone to train a new adviser for them. This endeavor may be easier for larger firms, which can bring in their own professionals to create development programs unique to their firms. Given that this means increasing payroll, a firm has to be seriously committed to the long-term process of recruiting and mentoring new advisers.

For smaller firms, the task is more difficult. Plus, in either case, it's important to remember that no outsider knows your firm the way you do, so you'll still have to be involved to some degree in the training process.

Another challenge to the process is the diversity of new advisers entering the industry. Knowledge, educational background, previous work experience, and goals and aspirations can run the gamut. Imagine the 22-year-old with a degree in finance, the 40-year-old who has worked in the industry but never as an adviser, the career-changer who is starting from scratch or the staff person who aspires to become an adviser. With these four individuals alone, you'd need four different training plans.

So where do you even start?

(More: Are schools adequately preparing next-gen advisers?)

The big picture

The best place to begin is by looking at the big picture — the critical skills a financial adviser needs to learn within his or her first few years in the business. With these topics as a starting point, you can then develop a training plan for a specific candidate:

• Industry language: Clearing firms, mutual funds, equities, bonds, assets, liabilities ... a new adviser needs to know the language of the industry. Books on this abound.

• Licenses: When brokerage or insurance licenses are required, they are part of the training equation. Online study courses are available from a number of providers.

• The financial planning process: The mechanics of gathering data from a client, entering it into firm-approved software, analyzing results, and forming recommendations is core to the financial planning process. Software companies may provide some online training, but highlighting your firm's approach is essential.

• Investment management: Advisers need to understand and be able to articulate the investment management process, even if it is outsourced to a third party. Attending a fundamentals class may be an option.

• Key concepts within a client's financial life: Budgeting, investing, retirement planning, education planning, estate planning, tax planning, and insurance are addressed within the CFP curriculum.

• Communication skills: The core of the adviser's art is the client connection. Using active listening skills, asking discovery questions, speaking in plain English, being able to put the client at ease, and displaying confidence are critical. Learning by observing other advisers, practicing, and receiving feedback is key.

• Technology and operations: Most new advisers need to learn how to submit buy and sell requests in good order. Closely related is training on the firm's CRM system, trading platforms and research software. Online tutorials may be available, but training is likely done in-house by existing staff.

• Business development: Some new advisers become service advisers for clients that other advisers bring to the firm. Other new advisers prospect for their own clients. Asking for introductions, holding events, using social media effectively and networking are skills that don't necessarily come naturally. Rainmaking classes are available via third parties.

(More: New entry-level securities exam seen to benefit firms, job seekers)

Learning never ends

This, of course, is just the beginning. Advisers new to the industry need to understand that the learning never ends. Observing what other advisers in their firm do — attending conferences, participating in webinars, reading current industry publications — is the best teacher for this.

Remember, every new adviser is unique, and you need to pick and choose those training components that are specific to your hire and your firm. In the end, however, nothing is more important than the communication that occurs between the tenured hiring adviser and the new adviser. This is the glue that holds all the pieces together.

(More: How to adapt efficiently to industry trends)

Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network.


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