When will our industry grow up?
This past week, I met an incredible young man who is just two years out of college. So far, he seems to have done all the right things, including studying finance, earning his certified financial planner designation and getting himself hired at one of the large brokerage houses.
Yet sitting there over coffee, his entire future ahead of him, he asked me where he'd gone wrong.
The firm he'd joined paid him a modest, first-year salary. Nothing unusual about that. The problem was that his supervisors had made it clear that his success and future income, and, frankly, likely his very survival at the company, was tied almost entirely to how many new clients he could bring in.
This was the kind of person most industries would love to have, yet his job is something that is nearly impossible for him to do: Go out and find wealthy people who will hand over their life savings to a 23-year-old.
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As I listened to his plight, I began to contemplate what his career track would be like if he had decided to work in another line of professional services. Accounting firms, for instance, hire new college grads who do important work for existing clients, but these firms certainly don't expect their new hires to be rainmakers.
So why is it that the wealth management industry expects their young people to be marketers? It's because most firms value bringing on new clients more than they do the servicing of existing ones.
The plight of this young man once again got me to wondering what our industry would look like if we grew up and emulated other professional services organizations.
We'd hire the best and brightest out of school. We'd pay them a decent salary and provide them with casework from existing clients, and we'd have them spend a significant portion of their time working alongside senior professionals.
About five years ago, when our firm had reached a certain size, we began hiring new college grads to put on the CFP track.
We bring in sharp, recent graduates for internships and then we hire the top candidates. We comprehensively train them and have them work in a variety of roles as we groom them to be advisers five years out. What we don't expect of them is marketing.
What we've found is that having a bunch of smart, hard-working support advisers has made the overall organization much stronger. (Our Net Promoter Score, a measure of the loyalty of a firm's customers, rivals not just the top firms in our sector, but the top brands in America.)
Twenty-six years ago, I began my career at an insurance giant with high-pressured sales quotas and a rah-rah atmosphere. After just a couple of years, my business partner and I left to create our own advisory firm, with the overarching goal of emphasizing the servicing and retention of clients.
Back in 1993, we thought it would only be a matter of time before everyone adopted this model.
But here we are in 2019, and I'm still wondering, "When our industry is going to grow up?"
Scott Hanson is co-founder of Allworth Financial, formerly Hanson McClain Advisors, a fee-based RIA with $4.5 billion in AUM.