Tap The Next Generation Of Advisors
College recruiting can help advisory firms overcome the shortage in skilled professionals predicted by demographic trends. Schools that have Certified Financial Planning Board-registered programs are turning out graduates who are well trained in the foundational skills of the industry.
While many firms recruit on campus, the most successful firms studied in Schwab Institutional's recruiting and retention report are much more likely to focus on schools with CFP programs. Eighty-two percent of successful fee-based firms say they are seeking candidates with CFP credentials, while only 51% of other fee-based firms are. (See Figure 3.)
Internships are an excellent way to connect with younger talent and can help a firm evaluate prospective employees' technical skills and decide if they are a cultural match. More than 80% of Texas Tech students surveyed by Schwab indicated that they planned to or already had participated in an internship program. Similarly, advisors have found success with internships. Nineteen percent of the firms with the best recruiting track record in the recruiting and retention report said that they used interns, and of those firms, nearly 60% hired a former intern, as opposed to just 40% of other fee-based firms.
Hire For Culture, Train For Skill
How new employees match up against a firm's culture and internal team dynamics is critical. According to the recruitment and retention report, the firms that are the most successful at recruiting hire for qualities that are not necessarily trainable-honesty, dependability and interpersonal skills vital to a client service business. Additional technical skills such as portfolio management, planning or technology skills can be acquired in formal training and professional development programs.
Too often there is a tendency for firms to focus solely on technical credentials while ignoring how well a potential employee fits from a cultural standpoint. Most managers recruit, hire and retain employees who can do the job, even though this does not guarantee they will be hiring and keeping someone who wants to do the job. To do this, firms must find a cultural fit. Culture is what drives how things are done in an organization.
The first step in recruiting and hiring for culture fit is to get to know your great employees. What job experience do they have? What attracted them to the financial advisor business and to the firm? What characteristics or traits do the best employees have in common? Are they analytical, competitive or outgoing? What are the top core beliefs or attitudes-about customer focus or teamwork, for example-that they all share? Knowing the answers to these questions gives firms the information they need to focus their interviewing and screening efforts in the right places.
More than two-thirds of the successful firms in the recruiting and retention report said they use personality screening (tests such as the Myers-Briggs Type Indicator or the Predictive Index) and psychometric tests (such as the Kolbe A Index). These testing methods can gauge a prospective employee's personality and cultural fit with a firm and can be helpful tools for measuring important characteristics for career development.
Use Multiple Channels And Recruit All The Time
There is no quick fix to the hiring problem. Success requires persistence and diligence and a willingness to use all the arrows in your quiver to find the right candidates. The top firms make use of every method available-from networking to Web sites to campus recruiting-and do so more consistently than their peers. The key is to conduct a number of different recruiting strategies, or all of them, on an ongoing basis, not just when there is an opening to fill.
While demographic trends and the need for quality, independent advice are expected to drive the future growth of independent advisors, the industry will need to overcome challenges in recruiting, managing and retaining talent. Victory in the war for talent means taking a deliberate, consistent approach to human capital management that enables advisors to stay ahead of the growth curve and outpace competitors.
David Welling is vice president of advisor practice management at Schwab Institutional, a leading provider of custodial, operational and trading support for approximately 5,500 independent fee-based investment advisor firms. Schwab Institutional is a division of Charles Schwab & Co. Inc. Member SIPC.
