Growing Your Advisory Business During The Big Retirement – Wealth Management | Gmx Pharm

The United States is in the midst of an employment phenomenon commonly referred to as the “Great Resignation.” Millions of people have exited the labor market in recent years, creating a labor shortage that is affecting almost every industry, including financial advisory firms.

This has made it even more difficult than usual for consulting firms to hire and retain staff, including associate consultants. To thrive in this environment, companies must develop targeted strategies for recruiting and retaining the industry’s top talent.

What are top consultants looking for?

Attracting successful consultants to your practice can be difficult, especially in the current environment. For every consultant available, 20 other firms can compete for his attention. The good news is that Advisors looking for a new home are likely to be drawn to what you have to offer – independence.

The first step in creating a recruitment and retention plan is to determine what top financial advisors are looking for in a consulting firm. According to data compiled by Diamond Consultants, most financial advisors want to work for companies that offer:

  • A robust technology platform and infrastructure;
  • A cheap compensation package;
  • Ability to grow with the company; and
  • A high degree of freedom, flexibility and control.

Recruitment of new consultants

The next step is to identify the best sources for recruiting new consultants. The most common strategy is to direct consultants away from other firms. This is not surprising considering that depending on the contractual agreement, these consultants may be able to bring their ledgers with them, resulting in an immediate increase in your company’s assets under management. Here are some more ideas for recruiting and hiring consultants:

• Use all available resources. There are so many more recruitment resources out there today. This includes online job boards such as Monster and ZipRecruiter, your company’s website and social media channels, centers of influence (e.g., attorneys, bankers, CPAs), local affiliates of financial planning associations such as the FPA and NAPFA, trade publications and websites, and your existing ones Customers .

• Use your professional network. Word of mouth is often the most effective strategy for finding new Consultants. Let other professionals in your centers of influence know that you are looking for new talent. They might even offer to pay a referral bonus for any referrals that lead to successful hires.

• Offer an internship program. Talk to area colleges and universities that offer financial planning classes to create a formal internship program. For example, you could hire one or two students to intern each semester and give each student a small stipend. If they perform well and fit into your culture, you could offer them jobs as associates after they graduate. They are more likely to be able to hit the ground running quickly as they already have experience working at your company.

Structuring your compensation package

Financial advisors take jobs for many different reasons, but money is usually at the top of the list. Therefore, if you expect top consultants to work for you, you must offer an attractive compensation package. This includes not only a competitive salary, but also health insurance, retirement plans and paid vacation.

Many consultants today also expect an incentive-based compensation plan with commissions or bonuses so that they are rewarded for higher production. According to industry studies, more than three-quarters of consulting firms reward their employees with some form of performance-related incentive pay.

Top advisors can also expect equity and earnouts. Ideally, shares should only be offered to more experienced consultants who can add tangible value to your business, although you could use potential future owners as a carrot to attract young consultants with potential.

Best Practices: 7 Tips for Attracting and Retaining Consultants

Consider the following best practices to attract, hire, and retain top financial advisors for your business:

1. Get your story out there. Make sure potential candidates know your company is a great place to work. In today’s digital world, there are many different ways to tell your story, e.g. B. Your website and social media. Also, leverage resources such as your clearing firm’s account managers, centers of influence (e.g., CPAs and attorneys), business development teams, conferences, collateral materials, and traditional media and public relations.

2. Differentiate your business from the competition. Show what distinguishes your company from other consulting firms. For example, do you offer superior product solutions or a portfolio of unique products? What about the latest cutting-edge technology and open architecture? Do you have a unique brand identity and a strong reputation in the local market? Or powerful marketing programs to generate new leads for consultants? And what about future partnership opportunities for consultants who excel at their job?

3. Refine your value proposition. You need to create a value proposition that resonates with consultant candidates and differentiates your company. Some examples:

  • Boutique diversified financial services company
  • trust and transparency
  • Recognized, industry-recognized principles
  • Conflict-free consulting services
  • cooperative partnership

4. Don’t try too hard to “sell” candidates for your company. It’s tempting to pull out all the stops to convince candidates that you are the best consulting firm and have no downsides. But no business is perfect, so don’t be afraid to acknowledge your weaknesses and a competitor’s strengths. Also, avoid using slang terms when speaking to candidates, such as “base contact only,” “check in,” or “return.” And when contacting candidates, call and share something you have to offer, such as: B. new developments in your company or an industry update.

5. Invest in technology. Most top consultants don’t want to work for firms that are skimping on their tech stack, so having the most up-to-date technology is critical to hiring and retaining. Tech-enabled advisors typically have higher AUM, higher AUM per client, and higher compensation than other advisors. Modern advisory technology typically includes financial planning software, account aggregation tools, portfolio management software, and document management systems, among others

6. Mentor and coach for new Consultants. The best young Consultants typically welcome coaching and mentoring from more experienced Consultants because they know how much it can help them succeed. So hire an experienced coach or mentor to work closely with new Consultants and teach them the tricks of the trade. Make sure potential employees are aware of your commitment to coaching and mentoring during the interview.

7. Offer career opportunities. Finally, remember that most top financial advisors are looking for more than just a job—they are looking for a career with the firm they choose. This is especially true for new consultants who are just starting out. To attract them to your company, present a career path with specific milestones for promotions, raises, and increased responsibility. This way they can see where they could be professionally in three, five or even ten years.

Be proactive

So far, there is little sign that the stress of the labor shortages caused by the Great Withdrawal will ease anytime soon. Therefore, it is crucial to create a recruitment and retention plan designed to attract the most talented and qualified financial advisors and retain them for the long term.

Gino DeRango is senior vice president at Axos Advisor Services.

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