Independent advisors need to lead the recruiting and training of a new generation of wealth managers, according Jeff Motske, president and CEO of Trilogy Financial, $3 billion hybrid RIA based in Huntington Beach, Ca.

“The public wants independent advisors and the industry is moving in that direction,” he said. “Clients are already asking older advisors about who is going to advise them when the advisor retires. Older clients want someone who can see their family through the estate transition process. A younger planner gives clients confidence that someone will be there to help them through their entire life and afterward.”

Most advisors are helping their clients navigate the impending $30 trillion wealth transfer from baby boomers to their heirs, said Motske, but may be ill-prepared for the massive wealth transition within their own industry.

Approximately $6 trillion in AUM will move from retiring advisors to younger practitioners over the next 10 years, said Motske, and more than one-third of the advisor workforce will leave the business. So far, the emerging academic financial planning programs are not producing enough graduates to fill the need for advisors, so firms will have to cast a wider net to find their next generation of workers, said Motske.

“If we don’t help new advisors in this marketplace and bring them up, there’s going to be a huge gap out there,” he said. “If independent advisors won’t train this new generation, someone else will do it, whether wirehouses, insurance companies or tech companies. We have an obligation to get young advisors trained properly and get their feet underneath them.”

Understanding The Audience

Motske said that wealth management firms should realize that younger audiences view them with skepticism. Many Americans still identify the financial industry with the 2008 global financial crisis. Media have exacerbated the impact of the crisis by continuing to paint the industry in a poor light, and good advisors end up being grouped in with bad actors.

“Like many advisors, one of our key values in our firm is that we’re client centered,” he said. “If you use that language with someone in the interview process who is brand new to the profession, it resonates with them, especially young people. If you have authenticity with young people, it helps to change their mindset.”

But the bad press is exacerbated by the financial industry’s general conservatism. As a rule, established financial companies, including advisors, tend to be resistant to change, he says.

Young people today are more likely to demand changes and more flexibility when it comes to workspace, schedules and lifestyles, benefits that the industry may not be willing to offer them, said Motske.

“This generation wants to help people, they’re very service oriented, and they want to have a purpose and meaning,” he said. “Advisors should be able to appeal to that characteristic. We take young people and sit them in client meetings so that they can understand the meaning of financial planning in people’s lives. If they see the client journey face to face, it can be a motivating, meaningful factor for them.”

Finding Young Advisors

Planning programs aren’t generating enough talent, so Trilogy Financial has benefitted from offering internships in partnership with a local business school, said Motske. Trilogy subjects interns to a thorough interview process to make sure a strong match is made.

Motske also said that his client base is also fertile ground for finding new advisors.

“Clients see what we do and the fun we have during our day, and they’re interested in that as well,” said Motske. “We have several people who were clients of ours who have become advisors.”

Wholesalers and other third-party vendors often have knowledge of the communities and regions they serve and can help point advisors towards new talent. Small independent advisors might be better served leveraging social media like LinkedIn to find young, talented people interesting in the profession.

Cater To Their Values

It’s a common stereotype that young people like philanthropy and values-based investing more than the general public, but Motske argued that members of the millennial generation tend to be socially conscious and expect their employers to share and reflect their values.

“It’s going to take time to understand what’s important to the young advisor,” he said. “You also want to make sure that you’re demonstrating and instilling the best values for the industry. Integrity and perseverance, for example.”

Motske suggests establishing a charitable matching program in which an employer can match an employee’s donations to a nonprofit organization of their choosing. Such programs establish closer links between employee and employer, and may also help older advisors bond with their protégés over “shared philanthropic values.”

Training Takes Time

Too many firms place obstacles to a young advisor’s development, said Motske, by setting prospecting or AUM growth expectations for them off the bat.

“It should be about building confidence,” he said. “We don’t put new advisors in a spot early in their careers where it might be highly uncomfortable for them. It’s also important to provide a lot of positive reinforcement. This isn’t an easy business -- there’s a lot of rejection involved -- so whatever is going on you want to start and finish every day in a positive way.”

Many of these same firms have also cut back on training programs for their young advisors. Talent development requires an investment of time and effort that lifestyle advisors may struggle with, said Motske, but they’re essential if young advisors are to succeed.

Set Them Up For Success

Young advisors will demand the digital tools necessary to reach clients and prospects and serve them efficiently, said Motske.

Wealth management firms should also establish guidelines that ensure all young advisors receive mentorship from an experienced peer. At Trilogy, this involved a minimum of nine months shadowing a “lead” advisor.

Gradually, Trilogy allows young advisors to take the lead themselves, then establishes career milestones for additional responsibilities and leadership roles.

“You have to lay it out for them in a roadmap,” said Motske. “Young people need to see the path ahead of them. You also need to manage expectations in both directions. Some people are close to being ready for leadership but tell us they’re not ready. Others are not ready, but say ‘promote me, promote me.’ There should be parameters all the way through their development.”