If retirement is somewhere on the horizon for you, you're probably trying to identify the right successor for your advisory business. You may consider naming a seasoned advisor who can take the reins immediately when the right time comes. Another option is hiring a junior advisor who can learn from you for several years before taking over. He or she can provide continuity of service and long-term stability for your business and clients before, during, and after the succession process.
Here, I'll dig into the challenges and benefits of finding the right junior advisor to join your team. If you want to eventually transition your practice to an internal successor—one who shares your philosophy and already cares about your clients—searching out a qualified junior advisor to whom you can pass on your knowledge is well worth the effort.
Challenge: Small Pool of Potential Candidates
According to a September 2013 Cerulli study, the total number of financial advisors in the U.S. in 2005 was 339,920. Just eight years later, there were approximately 305,000 advisors—a 10-percent decline. Cerulli estimates that by 2017 another 25,000 advisors will have left the industry, leaving a total of 280,000—a decline of almost 18 percent from 2005. In addition, financial advisors' average age is rising. Simply put, there isn't a plethora of junior advisor candidates to choose from.
Possible Solution: Smart, Strategic Searching
Finding the right fit for your business can be challenging, but it is certainly not impossible. Here are a few resources for successfully recruiting qualified advisors:
- Word of mouth and job boards are vital for making connections. Be sure to tap your personal and professional networks and share that you're looking for a junior advisor. Many advisors have success posting on job boards at the FPA, Indeed, and LinkedIn, as well as at local college and university career centers.
- New Planner Recruiting is a recruiting firm that can help you screen qualified young financial planners for your unique needs.
- Advisors Ahead employs young advisors and leases them to advisory firms for a specified internship and training. The organization recently formed a strategic alliance with Succession Link to connect younger advisors with older advisors who will sell their books to them down the road.
Challenge: Lack of Understanding of What Attracts Junior Advisors
Many established advisors do not know what younger advisors look for in a new professional opportunity. This makes it more difficult to recruit the right advisor—and even more difficult to retain him or her once hired.
Possible Solution: Consider Your Candidates' Perspectives
Remember the old adage and be sure to walk a mile in your candidates' shoes. They may be attracted to different elements of the job than you would be. In general, many young advisors are interested in professional development and growth, as well as being highly involved in the short- and long-term planning for the business. Be sure to emphasize your plans for involving your junior advisor in these processes.
During the interview process, it's a good idea to think of your experiences as a young advisor. Be sure to treat all candidates as you would have wanted to be treated.
Benefit: Fuel Growth
The process of finding the right advisor for your firm can be challenging, but it can be critical for managing growth and taking your business to the next level. Hiring a junior advisor can help catalyze success by enabling your business to take on a greater amount of assets.
Once the hiring process is complete, your work is certainly not over. Invest in your new hire's success through careful coaching, mentorship, and training. This will help him or her enjoy a smooth transition to the new role—as well as be more likely to contribute to your business's long-term growth and success.
Benefit: Build Out Your Succession Plan
Hiring a smart junior advisor is the first critical step in setting up your business to be transitioned to a well-trained, knowledgeable, and committed internal successor. This succession planning strategy is a great way to ensure that your business continues on with the same philosophy, high standards, and commitment to clients well into the future.
Have you hired a junior advisor for your team? Are you in the midst of hiring one? Share your successes and challenges by commenting below.