Going Against the Grain to Retain Financial Advisers

How to keep promising people in an industry beset by alarming attrition

by David R. LaBricciosa, CPA

The numbers are disappointing, if not downright depressing. According to LIMRA’s Agent Production and Retention Study, the percentage of new financial advisers who actually stay in the industry has hovered in the low teens for the past three decades. I find it difficult to believe our noble profession can accept that kind of retention rate when we have such a passion for what we do and who we serve. Part of the problem lies with how advisers are recruited. We need to start a new conversation about who should be introduced to this career and how to develop successful advisers who serve clients for generations to come. Beyond bringing the right people on board, many additional steps can be taken to help ensure they stay in the profession.

At AspireWealth Planners, the leadership team has drawn insightful conclusions about which factors have the greatest impact on retention. We found that new advisers are most likely to stay in the profession if certain developments occur within their first 12 months on the job, including

• 1) being partnered with a functioning team,
• 2) attending a consistent training program,
• 3) having joint field work partners who help them serve clients,
• 4) receiving counsel from a manager who holds them accountable for developing strong habits, and
• 5) working with a business development specialist to develop a marketing plan.

But it would be shortsighted to apply these concepts only to inexperienced advisers. Many experienced advisers in the industry aren’t thriving either and the threat exists that they will change professions as well. So how do you help experienced advisers? By ensuring they too are part of a functioning team or even offering them an opportunity to build their own team. Additionally, firms need to execute a marketing strategy that puts these experienced advisers in front of more potential clients.

Relevance of Relationships

AspireWealth emphasizes a relationship approach with clients, and we believe the same concept can increase adviser retention. To that end, our leadership team is responsible for championing the implementation of all our retention initiatives.
Upon joining the firm nearly four years ago, I emphasized three pillars to support our mission of being a successful organization that serves advisers who, in turn, serve our clients:

• 1) strong leadership that is committed to the organization’s vision,
• 2) advisers who seek to be lifelong learners in developing their skills, and
• 3) organizational investment in the value proposition that serves our advisers.

These pillars cannot exist independently of each other. A connected relationship between them is necessary to guarantee the greatest impact.

Beneficial barriers

One key aspect of retention is recruiting the right individuals in the first place. Any organization whose business model entails reaching out to the community must hire people who are comfortable in this role. During the interview process, try to ascertain whether someone is willing to devote the time necessary to succeed as a financial adviser and if they recognize there could be a steep learning curve.

Placing barriers to entry is a vital consideration as well. At AspireWealth, we ask candidates to complete exercises that survey their relationships and analyze the success criteria of their previous accomplishments, whether during college or the first few years of a different career.

Evaluating what people have accomplished already in their lives can help determine if they have the commitment to build sustainable careers as financial advisers. There’s no perfect formula, but some barriers to entry definitely make sense. Otherwise, we’d be letting everybody into the industry and that’s bound to negatively impact retention.

Consistency in conversation

At AspireWealth, many staff and resources are engaged in the onboarding process. We emphasize consistency in conversation with each candidate, so anything that raises a red flag with one member of the leadership team will be discussed as a group to ensure everybody is on the same page.

This collaboration is an essential step before candidates are welcomed to the organization. We make an offer only if the entire team agrees somebody has the potential to be successful in this career.

When a new adviser starts, AspireWealth places great emphasis both on initial training and subsequent support in the field. Think about it from the perspective of a client. Let’s say you’re invested in a financial plan and the firm sends an adviser to meet you by himself after he’s had only about three months of training. Under those circumstances, you probably wouldn’t be very confident in the plan.

Put another way, would you get in a plane if the only experience the pilot had was training in a flight simulator by himself for 90 days? I know very few people who would say yes to that question. Why should financial plans be any less important? Too many unexpected things can occur that a young adviser simply wouldn’t be prepared to handle individually. So although our training platform is an important component, we believe the partners who advisers engage with in the field, including coaches and fellow team members, play a critical role in their development.

Millennial Mentality

Any discussion about recruitment and retention these days inevitably turns to millennials, since they are the people most likely to be starting new careers. Justified or not, a perception exists that millennials are more prone to job-hop than previous generations and less likely to commit long-term to a specific company.

I believe the millennial generation has great ambition. They want to make an impact, be part of a strong culture that’s involved in the community, and contribute to a team-oriented environment. The leadership group at our firm is trying to build an organization that people want to join. If we create a good culture, provide career paths with clarity, offer abundant opportunities to be part of a team, and emphasize community involvement, then I believe millennials will want to stay.

AspireWealth encourages all of our advisers to create an individualized vision of who they want to become, not just professionally but personally, physically, financially, and if they’re so inclined, spiritually. But the unfortunate truth is many organizations don’t speak to the whole person. If advisers think all you care about is the numbers they put on the board, it’s only a matter of time before they go someplace else. People don’t leave firms, they leave people, and I believe that applies to every generation. ◊