In last week’s
Whether you’re a principal, a junior advisor, or the sole owner of your firm, you will almost certainly need to onboard a younger advisor at some point in your career. It’s almost certain—but it isn’t easy.
With the proliferation of CFP degree programs on college campuses all across the country, the career path these younger advisors are taking today looks quite different than yours did two or three decades ago.
For this column, I spoke with Aaron Coates, an advisor with Valeo Financial Advisors in northern Indiana. Coates, 36, went from working with partners near or at retirement age at his former firm, Compass Wealth Advisors, to working with more than 20 advisors who are right around his age at Valeo. Founder of FPA’s NexGen community, Coates has plenty of experience with the next generation of financial planners.
SS: When Valeo is looking for fresh, young advisors, where do they look?
AC: "First of all, finding someone who has the same philosophy as you is critical. In our case, the far majority of people have worked at brokerage firms, people who are younger and have discovered that it’s not their type of environment. If they’re not somewhere where they actually facilitate financial planning, they might be questioning things coming out of the CFP curriculum. If you can find that part, getting down to personality profiles and job skills is a much easier process than going through all that work on the front end and finding out the values don’t match."
SS: Wow, that’s a surprise. If you’re looking for someone who has the independent mindframe, though, why wouldn’t you look to advisors who are already working at independent firms?
AC: "If your firm’s similar to theirs, there has to now be an incentive in place—your means to convince them to do something different will only be based on you offering them more.
How do you know if you should get someone fresh out of a CFP program or someone with some work experience?
This is something I’ve debated in my own mind. In my firm, we want to be the exact opposite of the brokerage side and someone straight out of college curriculum doesn’t come in with the same value system that this is not just an occupation, it’s a calling.
For example, it’s nice when you’re hiring someone who has not just a feel for certain variable annuities that aren’t right in specific situations, but who has also seen people in the desk next to them selling those VAs to people. It gives you a whole different perspective.
Plus, if your firm isn’t operationally perfect, which let’s face it how many really are, you run the risk of the new person becoming disenfranchised. They could think the compensation structure isn’t exactly what they think it should be or the filing system isn’t all electronic. Those type of things can frustrate them if they haven’t had their first job yet."
SS: Do you look for something different if you’re looking to put someone on a path toward ownership?
AC: "If you’re hiring a young person, I wouldn’t start off with the expectation of ownership and I wouldn’t put it out there unless they’re so unbelievably talented and will bring so much value that you have to in order for them to join your firm.
When you do look for an owner, it’s good to look at external factors: are they just looking to move into this community and for somewhere to give them ownership? Will they take the next opportunity that offers them a quicker path to ownership? To protect your own interest, you want someone with whom there’s a thought of ownership—someone who expresses your same values and is committed to the geographic area, such as they want to raise a family in that community. That gives you better assurance that they’re willing to work through the difficulties that crop up in becoming an owner."
SS: I’ve heard some people say that when you’re hiring a young advisor, you want someone who is the opposite of you. Other people say you want someone just like you. Which is it?
AC: "I think it goes along the lines of the personality. If you’ve done a good job of mapping out the stages of your firm, it’s about what type of personality gets you to the next stage. The majority of the first generation of planners are Type-A, driven entrepreneurs. But if you’re really looking at building an organization, it takes all types of people.
For instance, with the Type-A, driven entrepreneur, the best thing for them is a detail-oriented person who keeps them on task and follows up after they’ve closed the deal. But then you get into the integrated financial planning—the life planning—and you need someone who can look at the big picture. So the next logical person to hire for that is a counseling personality. You have to be honest with yourself and determine who you are and what you need. But you also have to be able to stand them, work well with them and have reasonable expectations of the strengths and weaknesses of this person who isn’t like you."
