Do you have a plan for the future of your firm? Mentoring new college grads is a great answer.
Each year, our colleges and universities produce over 2.5 million graduates. Most, obviously, aren't ever hired by investment advisers and financial planners.
But the few who are, all too often, latch on with firms that grind them right back out of the industry by demanding they work on straight commission, drum up new business and do back-office work.
OK, we all have to pay our dues, but I think many successful, long-time advisers are missing out on a great opportunity to train and nurture a talented young person who could one day take over their practice.
The fact is that our firm has had incredible success hiring young men and women right out of college.
One of our most versatile and accomplished advisers joined us directly out of University of California, Davis over 20 years ago. We paid him a decent salary, sent him to grad school, mentored him, invested in him and watched him grow.
Today, this adviser manages a huge book of clients and is the go-to adviser for unusual or complex situations. He has not only spent years as the head of our investment committee, he often appears on our radio show, speaks at workshops and events, and is exactly the kind of person and adviser who could be named the successor at just about anyone's practice.
He's not alone here, either. Over the years, we've made it a priority to hire recent college grads who eventually become advisers.
One of the great advantages of hiring young people is that you get to train them in the way you do business. They'll learn your methodology of financial planning. Your way of managing investments. Your style of communicating with clients. They'll grow as you do, and your firm will become a part of their DNA.
And yet, from everything I read or hear about in my travels to conferences and various speaking engagements, the advisory sector is not only increasingly reliant on an aging workforce, but many successful firms have absolutely no succession plan.
Recruiting and hiring people right out of college is a solution that addresses the biggest problems we face. Yet too many of us continue to look for quick fixes.
We only want to recruit or hire a "seasoned adviser" who can bring along a book of clients to cover their salary. This is shortsighted, as their financial planning and investment style will greatly differ from yours.
Let's face it: Someday, you're going to want to upshift and expand, downshift and pull back, or sell outright and retire (and maybe all within a 10-year period). Having some well-trained young professionals in the fold adds versatility, value and energy. It helps them become established in a great career, gives your clients continuity and provides you with a clear path to succession. Even if your ultimate choice is to sell eventually, those younger professionals will make your firm that much more valuable when you do.
Scott Hanson is co-founder of Allworth Financial, formerly Hanson McClain Advisors, a fee-based RIA with over $4 billion in AUM.