The Recruiting Crisis in Wealth Management

I had the privilege of sitting down over lunch with Bryan Lieungh, VP in charge of new financial advisor recruiting at one of the world's largest and best known wealth management firms, Merrill Lynch, B of A.

We discussed the challenges all wealth management firms face these days around recruitment and onboarding of new financial advisors. Many of the challenges fall under the items my partner, Marilyn Cox, wrote about in her article How to Drive Financial Services Recruitment Results, but a few of the highlights from our conversation were:

• Financial advisors are getting old. The average age of a financial planner is 55 and nearly a third are over 60 (Jeff Opdyke, WSJ, 10/09/07).
• Firms are seeing fewer college students and grads choosing wealth management as a career. Many students and grads are targeting "cool" jobs in tech companies such as Facebook or Google.
• The market crash of '08 is still a recent memory and has soured many college students, grads and other potential prospects on the idea of working in wealth management. Millennials recall how much money their parents lost in the crash of 08 and all of the associated stress with those losses.
• The shrinking talent pool has pushed wealth management firms to find ways to improve recruiting efforts but it’s proving to be an expensive, time consuming process and unfortunately it’s not yielding the desired results.
  
  

So, what can firms do to overcome these challenges?

The solution to the first challenge seems rather obvious. Firms need to redouble their recruiting efforts and they need to jump on this immediately. But what about the challenge of this less-than-ideal perception of a career in wealth management? Wealth management firms need to convince prospective advisors that working in the financial industry can be fun, challenging and cool. No easy task.

Let's quickly address the least likely item to change quickly; company culture. Wealth management firms need to shed the perception of grandpa's place to work. The simplest (yet admittedly least likely to occur quickly) concept would be to lose the suits. Take a look at the daily attire of tech company icons such as Mark Zuckerberg or Evan Spiegel. They do not wear suits and ties. Even Steve Jobs who is held in the minds and hearts of millennials at a nearly deity status was known for his jeans and turtle necks. If wealth management firms want to shed this grandpa's workplace perception, they're going to have to lose, at the very least, the ties. *steps off soap-box*

In addition to the attire changes, to truly compete with these tech companies, firms really need to start acting more like them. Flexible work arrangements and much more fun, comfortable offices would be a great start. I can't tell you how often I've gone into the offices of these companies and thought, wow, this is remarkably like Neo's office building in the first Matrix movie. Very old, very depressing. Not so good for attracting a young, talented workforce who know what offices at google look like thanks to movies like The Interns.

Lastly, wealth management firms need to do a much better job at communicating one of the most compelling reasons to be a financial advisor – no fixed income ceiling. There are very, very few careers in the world that do not have a fixed salary cap. Wealth management advisor is one of those jobs. However, firms have done an abysmal job at communicating this to prospective advisors.

Now, we all realize making these changes at these major firms can be difficult (if not downright impossible if senior leadership isn't all on board) but a far easier task would be to simply work on the perception (even if that perception doesn't quite meet reality) that your firm is the best place anyone could work. How? Yep, you guessed it, marketing!

Firms can leverage today's marketing cloud technologies to build automated campaigns that target perspective advisors through all of the digital channels in which they interact. These campaigns could involve something as simple as drip/nurture email campaigns to display ads on Facebook or even leveraging ATMs on college campuses to deliver key messaging to prospective advisors. Without a huge investment in technologies and personnel, firms can launch these campaigns in a highly focused effort, targeting only the best prospects.

However, just like anything else, these firms have to want to change. For better or worse, over the next decade, the firms who embrace this change will be strong players in the market and the ones who do not will at the very least, struggle. The key characteristic of the successful firms will be those who start treating their recruiting just like their other best practice marketing campaigns.

What challenges are you seeing around recruiting at your firm? What innovative processes or technologies are you leveraging to meet these challenges?