Lately, though, she says the board has warmed to the idea of creating a financial planning/wealth management track as another outlet for grads facing a tough job market. That said, it would help if students knew what the profession is about.
"We're the best-kept secret out there," Briaud says. "Students might think about investment banking or becoming a broker, but they don't think about [becoming an] independent financial advisor as being an option because they don't know we exist."
Briaud talks up the advisory profession at career day presentations at A&M. "A lot students are interested in the profession when they hear about it because they like the combination of the analytical and people skills, and that they don't have to work until 3 a.m. like investment bankers," Briaud says.
Briaud says her firm hasn't been able to fill an opening for the past year despite interviewing a score of candidates. They want someone with a financial planning background, but are willing to hire and train a qualified finance grad and nurture them to the point of eventually becoming a financial advisor. "We're pretty flexible, but getting the right fit isn't easy," she says.
Lauren Lindsay, director of financial planning at Personal Financial Advisors LLC in Covington, La., can relate. For starters, she says members of the Financial Planning Association chapter in Baton Rouge have repeatedly offered to teach classes for a CFP program at Louisiana State, but to no avail.
And when Lindsay's firm posted a job opening, she says they interviewed several folks but had a hard time competing with the salaries of younger people who worked at brokers. At the wedding of the firm's then-intern, she met David Hutchinson, a friend of the groom. Hutchinson, 28, got his Series 6 securities license and was working for Capital One Investments at the time.
"I thought I was going to help people do their financial planning," he says. "But the job at Capital One turned into more of a sales piece and it was about product turnover." He adds he was told to sell just American funds, and was pushed to sell fixed and variable annuities.
Hutchinson described his situation to Lindsay at the wedding. "I took the opportunity to educate him on fee-only planning and what he could do, and he was intrigued," she says.
Hutchinson joined the firm, completed his financial planning coursework online from the University of Alabama and was slated to take the CFP exam in November. For now, he's an associate financial planner being groomed to take over the Covington office because Lindsay now lives and works in Houston and the firm's other principal, Robert Reed, relocated to Alabama after Hurricane Katrina.
"I think the game plan is I'll be the primary guy here and will start growing the business," Hutchinson says. He adds that after he earns his CFP marks, they want him to specialize in the area he's most comfortable with, whether it's retirement planning or investing. "We'll figure that out over time," he says.
Lindsay is confident she found the right person. "I know he took a pay cut to work for us, but the long-term rewards were worth it to him," she says. "Finding him was very tough, and daily mentoring ensures he is happy. I view him as the future of our firm and make sure he knows that."
Other Avenues
Advisor headcount took a hit during the recession. In the brokerage space, for example, large broker-dealers canned their least productive advisors and focused on poaching top producers from rival firms by offering fat bonuses. And to cut costs, many brokerages greatly reduced or eliminated their new advisor recruiting and training programs. According to Cerulli Associates, the rationale was simple: The average new, inexperienced advisor operates as a net expense during the first year or so.
With the markets in recovery, many broker-dealers have cranked up their new advisor recruiting programs. To illustrate the recruiting challenge, Cerulli points to Wells Fargo Advisors and its 21,000-strong financial advisor headcount at year-end 2009. After accounting for average tenure and natural attrition, Cerulli says the company must hire 2,000 advisors annually to maintain its current advisory staffing levels.
Some, like St. Louis-based broker-dealer Edward Jones, never stopped recruiting. Its advisor headcount jumped from roughly 9,000 in 2005 to a recent total of 12,700.
Its secret? An in-house referral network that encourages company employees to recommend candidates they think have the skills to change careers and become successful financial advisors. It's not exactly young blood, but it is new blood. "The industry needs more firms adding new people to the industry rather than buying brokers from each other," says Mike Zaun, a partner responsible for advisor recruiting and hiring at Edward Jones.
Similarly, some RIAs prefer hiring career changers rather than twentysomethings. Lyn Dippel, vice president and principal at Financial Advantage Inc. in Columbia, Md., says her firm previously hired people out of school and trained them to get their CFP certificates, but they eventually left for various reasons. "Young people are too transient," she says. "They also don't have the perspective of the life experiences where they can relate to their client's experiences, and that helps when you do financial planning, estate planning and the like."
Instead, Dippel's firm hired one woman who held a high-level post in the information technology department of a mutual fund company. She left the workforce for five years to raise her children, and Dippel says Financial Advantage hired her to do back office chores at a low rate while training and supporting her as she studied for the CFP exam. She passed the exam, and now does planning work for the firm.
Dippel says the firm recently hired another former stay-at-home mom re-entering the workforce, and that person is doing assorted tasks such as business development and compliance. In addition, they also hired a CFP certificant who had his own tax practice but tired of running his own shop.
"Many times, people in their 40s are established and aren't going anywhere for the most part," Dippel says. "They have life experiences, are serious and dedicated, and generally are quick learners."
Start 'Em Young
Bringing in career changers is a viable strategy, but some people believe the industry's best long-term strategy is encouraging younger folks to enter the business.
"There are only so many larger [RIA] firms that can hire younger people as full-time staffers, but I think you can allow interns and part-timers to mature into full-time positions," says Karen McIntyre, vice president and director of financial planning at Vantage Point Advisors Inc., a fee-only planning firm in Lower Gwynedd, Pa.
As a member of the Northeast/Mid-Atlantic regional board of directors of the National Association of Personal Financial Advisors, McIntyre says one of her goals is to promote matching interns with practitioners, particularly solo practitioners who want to grow but don't feel comfortable hiring a permanent staff member. "When newer graduates obtain experience, they are more marketable to firms willing to hire younger practitioners," she says.
Fox, Joss & Yankee LLC, a fee-only firm in Reston, Va., actively aims to promote new talent through an internship program that hires two interns every summer from either Texas Tech or Virginia Tech, the two best-known college financial planning programs. They've also hired two Texas Tech grads for full-time positions.
"We've spent a lot of time in recent years cultivating relationships with Texas Tech and Virginia Tech because we believe to attract the best talent, we need to be known in those schools and develop an internship program where professors will recommend our company as one of the best programs for their students," says Jon Yankee, partner and chief financial officer at the firm.
Yankee says his company recently overhauled a part-time receptionist job and made it a full-time, career-track position designed to be a springboard to full financial planner status. The new post was filled in January by a recent Virginia Tech grad, Tom Saunders.
Yankee says Saunders has gone from solely meet-and-greet and various administrative support duties to doing things such as behind-the-scenes prep work for client meetings. "If he does well, then probably after two years we'll move him into an associate financial advisor position," Yankee says. Starting pay at this newly-created career-track position will be $35,000 to $50,000, depending on a person's qualifications.
Possible Solutions
The Cerulli report says there are no silver bullet cures for the talent shortage problem, but it does offer possible solutions that apply across different advisory channels. One is to bring novice advisors into existing advisory teams to provide a supportive environment. But rather than just dumping all the mundane work in their laps, senior advisors should set them up with a sense of the duties they'll eventually transfer to the junior advisors. Often, these new advisors fill a role within a team, as an investment or financial planning specialist, for example.
Another way to successfully integrate new advisors is to let them cultivate clients with fewer assets, so that hopefully these pairings will grow together as the client attains more wealth later on. In turn, this enables senior advisors to focus on bigger clients.
The main reason young advisors bolt their firms is that they're not given the chance to fulfill their career goals, says Michael Kitces at Pinnacle Advisory Group. "I think firms need to create better models that deploy and develop young talent while actually getting benefit from it themselves," he says. "That's something we see in the corporate world."
Options
For Brandon Carroll, the Virginia Tech student, his interest in financial planning is personal: He says finances were one of the main factors behind his parents' divorce. "If you can help people deal with financial struggles through planning, you can help save a family," he says. "That's the kind of impact you can have in this field, and that's motivating.
"I'd get more satisfaction working with average Americans needing financial help and positively impacting their daily lives than by helping wealthy people accumulate more wealth and shelter their taxes," he continues. Carroll says he realizes that doesn't jibe with many of the advisors he spoke with at Schwab Impact who have steep client minimum investment amounts.
Last summer, Carroll interned with an advisor at LPL Financial office in Roanoke. He appreciated the chance to learn the broker-dealer side of the business, and he says he's willing to go the Series 7 route to get experience. But he believes working for a fiduciary, fee-only RIA best suits his career goals. "I want to do the CFP route rather than the Series 7 route because we're in a program built for the CFP," he says.
Carroll hails from Poolesville, Md., a town of roughly 5,000 people not far from Washington, D.C. Confident and enthusiastic in a polite and thoughtful way, he seems like a go-getter. A former Virginia Tech student body president, Carroll graduates in December and plans to take some time off and stay in Blacksburg, Va. to help run a marketing company he started with two friends that caters to small businesses in the area. In the interim, he plans to study for the CFP exam. "I need to bone up on equities in areas like options," he says.
And Carroll needs to think about other options, such as those pertaining to his career. Although he talks passionately about the financial planning industry, he might veer off into marketing. "If I go all-out with the marketing firm and it takes off ... what the hey, who knows," Carroll says. "I have a lot to ponder, but I'm young enough where I have different possibilities."
For the advisory industry in need of new blood, Carroll represents the kind of potential hire it can't afford to let slip away.