Outside-IN

Hire new college grads, and help plan for the future of your firm

Recruiting and hiring people right out of college is a solution to the industry's biggest problems — aging advisers and the lack of succession planning

Jun 11, 2019 @ 12:09 pm

By Scott Hanson

Do you have a plan for the future of your firm? Mentoring new college grads is a great answer.

Each year, our colleges and universities produce over 2.5 million graduates. Most, obviously, aren't ever hired by investment advisers and financial planners.

But the few who are, all too often, latch on with firms that grind them right back out of the industry by demanding they work on straight commission, drum up new business and do back-office work.

OK, we all have to pay our dues, but I think many successful, long-time advisers are missing out on a great opportunity to train and nurture a talented young person who could one day take over their practice.

(More: 'Retire in place' doesn't cut it as a succession plan)

The fact is that our firm has had incredible success hiring young men and women right out of college.

One of our most versatile and accomplished advisers joined us directly out of University of California, Davis over 20 years ago. We paid him a decent salary, sent him to grad school, mentored him, invested in him and watched him grow.

Today, this adviser manages a huge book of clients and is the go-to adviser for unusual or complex situations. He has not only spent years as the head of our investment committee, he often appears on our radio show, speaks at workshops and events, and is exactly the kind of person and adviser who could be named the successor at just about anyone's practice.

He's not alone here, either. Over the years, we've made it a priority to hire recent college grads who eventually become advisers.

One of the great advantages of hiring young people is that you get to train them in the way you do business. They'll learn your methodology of financial planning. Your way of managing investments. Your style of communicating with clients. They'll grow as you do, and your firm will become a part of their DNA.

(More: Hiring young advisers: You can't start too early)

And yet, from everything I read or hear about in my travels to conferences and various speaking engagements, the advisory sector is not only increasingly reliant on an aging workforce, but many successful firms have absolutely no succession plan.

Recruiting and hiring people right out of college is a solution that addresses the biggest problems we face. Yet too many of us continue to look for quick fixes.

We only want to recruit or hire a "seasoned adviser" who can bring along a book of clients to cover their salary. This is shortsighted, as their financial planning and investment style will greatly differ from yours.

(More: Financial firms must attract millennial advisers to serve new generation of clients)

Let's face it: Someday, you're going to want to upshift and expand, downshift and pull back, or sell outright and retire (and maybe all within a 10-year period). Having some well-trained young professionals in the fold adds versatility, value and energy. It helps them become established in a great career, gives your clients continuity and provides you with a clear path to succession. Even if your ultimate choice is to sell eventually, those younger professionals will make your firm that much more valuable when you do.

(More: Why our firm hired a data geek instead of another financial adviser)

Scott Hanson is co-founder of Allworth Financial, formerly Hanson McClain Advisors, a fee-based RIA with over $4 billion in AUM.

0
Comments

What do you think?

View comments

Most watched

INTV

Young advisers envision a radically different business in five years

Fintech and sustainable investing are two factors being watched closely by some of the 2019 class of InvestmentNews' 40 Under 40.

INTV

Young professionals see lots of opportunity to reinvent the advice experience

Members of the 2019 InvestmentNews class of 40 Under 40 have strategies to overcome the challenges of being young in a mature industry.

Latest news & opinion

InvestmentNews' 2019 class of 40 Under 40

Our 40 Under 40 project, now in its sixth year, highlights young talent in the financial advice industry. These individuals illustrate the tremendous potential of those coming up in the profession. These stories will surprise, entertain, educate and inspire.

Galvin to propose fiduciary rule for Massachusetts brokers

The secretary of the commonwealth is proposing a fiduciary standard in response to an SEC investment-advice rule he views as too weak.

Summer reading recommendations from financial advisers

Here are some books that will keep you informed and entertained during summer's downtime

4 strategies for Roth conversions

There's never been a better time to do a Roth conversion, and here are several ways to go about it.

Cetera latest to be hit with data breach of personal information

Company is offering clients complimentary, two-year membership to an identity theft protection and credit monitoring service.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print