Independent Financial Advisors Must Approach Hiring and Retention Much More Thoughtfully
In the independent wealth management space, third-party recruiters, talent search firms and consultants play a crucial role in helping to align firms with financial advisors.
But it doesn’t just end there. For independent financial advisors seeking growth, there is no substitute for bringing aboard additional talent in the form of client-facing professionals or experienced support staff.
While competing effectively for talent at either the firm or advisor level can have its share of challenges during the best of times, the intensely competitive marketplace for skilled employees makes things that much tougher right now.
And of course, what happens when you bring aboard personnel who just aren’t a fit with your business?
This is an especially thorny opportunity cost as well as financial cost for independent FA businesses, where every dollar and hour of time spent hiring and training a new team member is money or effort spent that could make or break the firm.
That’s where Adviser First Partners – founded by Hank Multala, the firm’s President, in the spring of last year – strives to transform traditional talent search and alignment dynamics.
Multala – a wealth management industry veteran whose pedigree includes stints at Lincoln Investment Planning as well as Cetera Financial Specialists – prides himself on delivering the wealth management industry’s first and only fiduciary solution.
Adviser First Partners uses weighted compatibility standards built by psychologists to match financial professionals to broker-dealers, hybrids, RIAs and other financial institutions.
Wealth Solutions Report recently connected with Multala to get his perspectives on how independent FA businesses can best position themselves to compete effectively in the intensifying battle for talent.
WSR: Why are so many independent financial advisor businesses having such a tough time bringing aboard – and retaining – strategic talent? And what should they be doing differently to better identify long-term hires?
Well, let’s start with the fact that right now, every industry is facing the same challenges when it comes to filling critical roles. We’re in an environment characterized by stiff competition for talent, high employee turnover and a lack of skilled candidates.
Now, here’s where it gets interesting – The strategic positions we have placed for our clients were filled by people who weren’t looking. Normally, these individuals are happy in their present role and do not respond to job posts.
This speaks directly to the fact that most problems that occur in job placements fall directly on the shoulders of the search firms. Strategic hires, especially those at the director level or above, should not be a “shotgun” approach.
Rather, these hires should each be done based on an exclusive search that is customized, which creates a higher priority within the headhunting organization, generates greater vetting, feedback and produces real-time updates. All of which, in turn, which greatly increases the likelihood of success and significantly reduces the risk of a bad hire.
At the end of the day, search firms must collaborate closely with their clients, meticulously do the research, and then go out and find the talent.
WSR: What are the top three to four actions that independent financial advisors can take to more effectively identify and recruit individuals who are a great long-term fit with their businesses?
Since competition for qualified talent is always at a premium, we suggest firms focus on a few key areas. First, do not skimp in compensation, and pay above average salaries.
Next, lead with perks, innovation, and reputation by answering the question, why would someone work for you?
And finally, stop looking for the “perfect” candidate – They do not exist.
Numerous candidates have additional experience and knowledge that will positively impact your business and it’s crucial to recognize how best to utilize their unique skill sets.
WSR: What are the top reasons why key employees decide to leave an independent financial advisor’s business – And what can the advisor do to prevent them from exiting?
Employees leave because they are under appreciated, undervalued, lack of feedback and seek a different work environment.
All the reasons for leaving can be addressed through a well thought out retention program that a company must constantly evaluate and commit to.
Recognize big & small accomplishments and notable achievements, encourage feedback and input, provide individual flexibility, empower responsible employees, and stop micromanaging.
This is also an important point: Employees also don’t leave companies, they leave managers.
If all the tools are in place for retention, perhaps the turnover issue rests internally within the management group.
WSR: Do you see the competition for talent – whether client-facing or operations-related – continuing to intensify in the independent wealth management space? Why or why not?
Competition for top talent is always at a premium, especially in an industry that is facing continued consolidation, greater regulation, and intensified competition, all of which describes the wealth management space today.
Under these circumstances, it becomes more imperative to assure that the character of all employees aligns with the culture of the firm.
To succeed in bringing aboard and retaining talent, management needs to communicate with more transparency, while fostering an environment where all employees recognize their contributions to the business…and that all their individual input is essential to the survival and success of the business.
Michael Madden, Contributing Editor & Research Analyst, can be reached at firstname.lastname@example.org