“We pay them a living wage while they are taking those exams and getting trained,” said McCance. “Once we get them through that, we take them through extensive courses on estate planning, retirement planning, income planning, investment planning and communications planning.”
Elder advisors ready to plan their transition out of their practice can select their own successor from among the TAG TEAM associates to ensure that the new advisor is compatible.
The outgoing advisor then provides mentorship and a deeper, more specialized level of training for their associate.
The model gives elder advisors the knowledge that their clients will be cared for by a trained, like-minded young advisor and that there will be no breaks in the continuity of client services during the transition.
“Advisors tell us that this is the single biggest business decision they’re going to make,” said Cadigan. “It’s a very emotional process. We’ve come to understand that the money is a part of it, but it’s not the biggest factor. The biggest factor is how are individuals going to treat the clients after they’ve left. They bump into their clients every day and they’ve become friends, [so] did they make the right decision by bringing in the right person?”
Transitioning advisors can choose to leave their practice at their own pace under the model. Under one scenario, TAG 2.0 can serve as a “disaster succession plan” for smaller advisors, said McCance, where Trust Advisory Group would acquire the practice if the senior advisor becomes disabled or dies.
Advisors could also choose to transition their book of business gradually to Trust Advisory Group, said McCance.
The TAG 2.0 initiative is also working to add more diversity to advisory practices. TD Ameritrade’s 2019 FA Insight People and Pay study found that RIAs are reporting that just 5% of their personnel are diverse. To combat the problem, Trust Advisory Group is placing special emphasis on sourcing diverse next-generation talent.
“The industry still doesn’t look attractive to the diverse group we would like to hire,” said McCance. “We still have a lot of work to do on that front.”