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By Paula Carlson
PRACTICE MANAGEMENT

Time to grow? Recruiting top talent for your financial professional business

10/27/2020
By Paula Carlson | 10/27/2020
Businesswoman leading job interview

Is this really a good time to grow your business – in the midst of a global pandemic and a lingering recession? 

The answer is a resounding “yes,” according to Gary Schwartz, executive vice president of North Star Resource Group, a Minneapolis-based financial services firm. “Right now, people need advice. The recession in 2008 – 2009 was purely an economic crisis. Now we have an economic crisis, a pandemic, civil unrest, and millions of people out of work. We have people concerned about retirement, or sending their kids to school, or selling their homes. These are heavy, hard decisions, and they need advice.”

At the same time, the number of financial professionals providing advice may be facing a steady decline.  According to a report from Cerulli Associates, a research and consulting firm, the number of financial advisors is expected to decline each of the next three years. Over the next 10 years, Cerulli estimates that more than 111,500 advisors will retire, representing more than one-third of the workforce.1

But the good news is that there may be more opportunity today than ever before to recruit top talent, whether it’s interns, new college graduates or career changers. The pandemic has given people more time to reflect on what they are truly passionate about and to explore new career options, says Randy Doroff, chief executive officer of Fathom Advisors (a private wealth advisory practice of Ameriprise Financial Services LLC). 

Doroff says he is constantly keeping an eye open for potential new team members from all aspects of life to add to his team of about 24 financial professionals and support staff. 

Recruiting recent college graduates

College graduates have always been a fertile area for new financial professionals, but life during the pandemic may have made the job of recruiting new college graduates even easier for financial firms. “One change during Covid-19 is that the availability of students has increased,” explains Schwartz. “The relative lack of opportunities for recent graduates helps us.”

In many cases, the new recruits begin before graduation as interns. “We continually have a group of interns interested in the business,” explains Schwartz. “They get licensed, learn the business and are able to work with an experienced, successful advisor. It gives them the opportunity to see if they like it. At the same time, it’s like a long interview process for us.  We get a chance to watch them over the summer to see their ethics and attitude.”

Last summer, the firm hired nine interns at $12 an hour. At the end of the summer, three decided to move on, but the other six asked to continue to serve as interns. “Most of these students were going to be taking classes from home because of the pandemic, which made it easier for them to continue to work for us as interns, including those who go to school or choose to live in a different state.”

Landing career changers

Schwartz believes that the pandemic has opened up a new opportunity to land motivated career changers. “We’re seeing career changers who want to leave their jobs for greater flexibility to work from home and arrange their schedule around family commitments.”

But Schwartz says his firm is very selective in its recruitment process. “We’re looking for career changers who have a deep knowledge of the market, business development and the industry.” They also need to be well connected. And they need to bring a network of connections with them. 

Schwartz asks candidates to provide 300 names of people they know, then meet with 50 of those people to see their response. “It’s basically a way to preview their possible career,” he explains. In their meetings, candidates are advised to pepper their contacts with a variety of questions – “what do you think of advisors? Do you have an advisor? If I become an advisor, would you like to work with me? Would you at least allow me another conversation?”

If the interviews go well, and their potential for bringing in new clients seems solid, Schwartz is likely to make them an offer.

Selling the concept

As the pandemic swept the world, recruiters for Schwartz’s firm were concerned that the environment for recruiting new financial professionals would be extremely difficult. 

Schwartz quickly worked to change their mindset to align with his firm’s core philosophy – which is to help people navigate today’s world and beyond.  “We took the approach with our recruiters that they had the greatest opportunity they would ever have in front of them – acres of diamonds. There were students looking for opportunities and career changers looking for something different who may have been furloughed or who believed that their career was going nowhere. Once our recruiters began to see this period as a remarkable opportunity, our recruiting picked back up. “

The message they stressed with new candidates, according to Schwartz, was that “there's never been a better time to be an advisor. People need what you do. They value what you do. There are a lot of good reasons to be enthusiastic. We’re giving you the keys to a Ferrari and letting you drive it.”

Strategies for successful business growth

  • Maintain a growth orientation – with the right recruits. Doroff says he keeps a continual mindset of being growth‑oriented, but not by sacrificing the values of his team. Before anything else, a candidate must exude trust, a high level of ethics, and compatibility with the other members of the team.
  • Purpose before profit. Define your purpose and truly believe you are offering a meaningful experience that helps people. Schwartz lives by the three “I’s” – impact, independence and income. Making a positive and meaningful impact must be part of the value proposition, especially for the new generations. 
  • Don’t wait until you can afford it. “If you wait until you can afford to bring in new talent early in your career, you are waiting too long,” says Doroff. “If we can figure out how a new employee or technology can help us do a better job of serving our clients and growing the business, we will move forward with it. We also believe in the mindset that leaders eat last.” Randy’s first financial professional hire was completely unplanned. His brother Todd was making a career change from teaching to financial services. He had a job lined up with the Ameriprise corporate office but then the recession hit in 2008, and Ameriprise put a hiring freeze in place. He needed a job and Randy was short-staffed, so they defined the benchmarks they needed to achieve in order for it to be a great fit for both Todd and Randy.
  • Determine the fit. Figure out how your tasks and those of your team can be realigned to incorporate the skills of your newly hired talent, and determine the time it will free up for you to grow the business. Doroff says he will not bring on a new employee if he doesn’t think he can help that person grow in their career and have a positive impact on their life.
  • Be selective. “We are always looking for a person who exudes the purpose we are looking for,” says Doroff. “You can train them on the technical piece later.” When evaluating how a potential new hire may fit into the organization, Doroff considers three key areas: 1) identify tasks the new person could take on from other team members; 2) determine how they could reconfigure their team tasks to operate most efficiently; 3) determine the additional time team members may be required to devote to business development and to serving new clients.
  • Look for people from all aspects of life. A diverse team of financial professionals can help your practice expand into areas you may not have been successful with before. “We have a team of people from a range of backgrounds,” says Doroff. That includes a nanny, owner of a spa, someone Doroff met on the golf course, as well as referrals from his team members and family. If he encounters an exceptional person who meets his profile, he tries to come up with a way to carve out a place for them on his team.
  • Recruit virtually. You can tap into remote communications tools to reach prospects virtually. For instance, Ameriprise Financial2 reports that its virtual recruiting strategy, put in place in March 2020, has been paying off with more than four times as many financial professionals engaging with the firm than a year earlier through video, webinars, VIP meetings, and open houses.

Once you land them, train them

Internal training programs have become increasingly important in order to attract and train qualified financial professionals and integrate them into your team. As retiring financial professionals exit the business, you will need new qualified financial professionals to fill the gaps. “Make certain everyone stays in their lane,” suggests Schwartz. Recruiters identify talent, Schwartz and his team select the candidates, and the onboarding team makes certain they get started on the right track and get the support they need in order to be successful and profitable.

While opportunities for adding new talent to your firm abound, there are challenges. “While some progress is being made, the industry is struggling to recruit and retain advisor talent that is adequately prepared to inherit the businesses,” according to Michael Rose, associate director of wealth management at Cerulli Associates.3 As a result, financial professional firms are not only ramping up recruiting efforts to bring new advisors into the industry but are also honing their training strategies to improve success rates. 

“It will be increasingly important that firms operate successful training programs in order to attract and train qualified advisors, integrate these younger advisors within teams for whom they can serve as a pipeline of potential successor candidates, and operate effective business succession programs for retiring advisors,” Rose added.

While recruiting new talent during this pandemic certainly has its share of obstacles, now is a crucial time to build your business. With a little extra effort now, you could set up your business for steady growth for many years to come.


Paula Carlson is the president of Momentum, a financial services-focused marketing firm.

1Cerulli Associates, A More Diverse Advisor force Can Help Counteract Looming Talent Shortage, February 2020

2Ameriprise Financial’s New Virtual Recruiting Experience Getting Traction with Seasoned Advisors, Businesswire, May 28, 2020.

3Cerulli Associates, Advisor Retirements Expected to Set More Than One-Third of Industry Assets in Motion, November 2019

The concepts presented are intended for educational purposes only. Check with your organization for any specific requirements or restrictions they have related to client related activities.

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