A generation gap between younger and older financial advisers is widening around the issue of career growth for those who are newer to the profession, observers say.
Some less-experienced advisers are champing at the bit to move up and become partners in their firms or go off on their own, and they are frustrated by the lack of programs at their companies to help further their careers.
Meanwhile, many veterans think that the newbies possess a sense of entitlement, and first need to log more years and gain more experience.
Younger advisers who graduated from
financial planning programs at prestigious universities increasingly realize that their degrees don’t guarantee them a ticket to firm ownership, and they are learning that they must hone their skill sets before making it to the top, advisers say.
Those who are new to the profession need to master the technical skills, understand the mechanics of financial planning and pay their dues before they move on to talking to clients and getting their ideas heard, said Paul LaViola, vice president at RTD Financial Advisors Inc. in Philadelphia, which manages $350 million in assets.
Critical knowledge is important, but the real test is whether an adviser can take a complex topic and make it simple for clients, said Mr. LaViola, 32.
“Is an adviser able to master those skills and bring clients in the door?” he asked.
However, many financial-advisory firms haven’t put in place a career track for the younger generation, he noted.
“There is a fault line between the older and younger advisers,” said Mr. LaViola. “We need a career track ready for us.”
It takes time
One younger adviser said that patience is key.
It takes time before advisers are in a position to own their firm, according to Eddie W. Kramer, 25, a financial adviser at Abacus Planning Group Inc. in Columbia, S.C., and a graduate of the financial-planning program at Texas Tech University in Lubbock.
Abacus Planning Group manages $500 million in assets.
“Before advisers feel that they have rights to ownership, they should continue to give to the place they work. It takes 10,000 hours — or 10 years — to feel that you are at a level where you deserve ownership,” Mr. Kramer said.
One seasoned adviser said that forging better lines of communication between the older and younger generations is crucial to a firm’s growth.
Transition plan
“Senior planners are remiss not to hire a younger planner. The faster we get them up to speed, the sooner we can pass more off to them and can do more to grow the firm,” said Ronald E. Wilkinson, a partner at Security First Advisors in Lake Oswego, Ore., which manages $183 million in assets.
Improving the relationship between the old and new guard is an important part of transition planning.
Advisers need to develop a growth plan that leads up to transition and recognizes new-client asset growth, rather than relying on organic growth, said David K. Goad, president of Succession Planning Consultants LLC in Newport Beach, Calif.
“The growth plan can help reward and retain the junior associate to be ready for the down payment to afford the buyout of the first portion of the firm,” he said.
But “senior advisers have a hard time pulling the trigger on a succession plan,” Mr. Goad said.
“Everyone says they need strategies that identify what needs to be done from a qualitative and a quantitative perspective that allows both parties to be on the same page.”
