How do you identify and hire future partners as part of your firm's succession plan?
It's a lot more complicated than placing an ad, interviewing a slew of eager candidates, and picking from the top of the list.
As we advisors start to go gray (or already are!) and think of retirement–like many of our clients–it's become increasingly hard to find talented, new advisors to fill the ever expanding void in the industry. A survey done last year by Cerulli Associates Inc. showed that only 22% of financial advisors were under 40 (only 5% were younger than 30), and the average age of advisors was 49.6. At the same time, the total number of advisors decreased 4.3% from 334,919 in 2004 to 320,378 in 2010.
Why the shortage?
Well this isn't your father's financial advisory industry. Competition is fierce, margins are shrinking, and changing regulations (including legal and compliance issues post-Dodd-Frank) can be overwhelming.
The new crop of advisors also has to straddle the thin line of supporting baby boomers while adapting to the changing needs of the younger, tech-savvy generation. It's a bit of a split-personality–balancing what has worked in the past with what's old news by the end of the day.
That being said, our business is booming, as reported by the Bureau of Labor Statistics. According to the report, the number of jobs for personal financial advisors has a projected increase of 32% by 2020 (or 66,400 jobs). This is significantly higher than the average growth rate of 14% for all occupations.
So what will the next generation do for the industry and more specifically, your clients? How do you find someone who ultimately wants your job?
Start with hiring
I've said this before: it's critical that you find advisors who share your values (see my previous post on avoiding hiring mistakes). This goes beyond stellar credentials and experience; you need to convey very clearly to a candidate what you do, what motivates you, who your clients are, and why you do what you do every day.
If you want to be successful, you have to take your time in the hiring process–and be clear and articulate that what you're looking for long term matches what your candidate wants.
That's not to say you want a clone, absolutely not. New ideas should be expected, you just need to stick to your guns when it comes to core values.
