Commonwealth expands college ties to stem succession challenge

With more than a third of financial advisors expected to retire in the next 10 years, Commonwealth Financial Network is building more recruiting ties to college planning programs.

The Waltham, Massachusetts-based brokerage and registered investment advisory firm is ramping up a pilot program it began last year at Bentley University, a college near its headquarters. Commonwealth is now partnering with eight more planning schools on campus recruiting visits, a job seeker directory and invitations to the company's conference. The "talent exchange initiative" helps students from the planning programs see if a career as a financial advisor or in another professional role in wealth management would be a good fit. It also pairs older planners with a potential succession partner, according to Commonwealth Vice President of Field Outreach David Israel.

"It opens up that aperture, if you will, to say, 'When I'm in school, I don't necessarily see these opportunities, and now I get the chance to do it,'" Israel said in an interview. "The numbers are daunting in terms of replacing this generation of advisors."

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Almost 37% of financial advisors managing a combined $10.4 trillion in client assets — or 40% of the industry's total — expect to retire in the next decade, according to research released by Commonwealth and research firm Cerulli Associates earlier this year. The expansion of Commonwealth's pilot program followed the firm's tools and resources for advisory practices that include more than one member of the same family and a focus across the industry in recent years on identifying successors through M&A and matchmaking. Internships and training efforts such as the BLatinX Internship Program, Hannah Moore's Externship courses, the Mu Nu Upsilon Fraternity and expanded scholarships offset the industry's succession problem as well.

With women and many minority groups still dramatically underrepresented among the population of advisors, wealth management professionals, firms and organizations like the CFP Board should emphasize recruiting from historically Black colleges and universities, according to planner David Stevens, the president of Omaha, Nebraska-based Stevens Capital Partners. In that vein, Lincoln Financial Group's Lincoln Financial Foundation and the United Negro College Fund launched the UNCF Lincoln Financial Scholars Program this month, joining existing industry partnerships with HBCUs. Individual advisors can play a big role in helping young people and career changers of all backgrounds get into the field, Stevens noted in an email.

"I've had the pleasure of introducing a lot of mentees to the financial services industry over the last 20 years," Stevens said. "I enjoy coaching them through career decisions, strategic advice, crucial conversations and client situations. Having a guiding coalition in our lives is essential to our success. Many of my mentees were the first in their families to understand what the words 'asset allocation' or 'financial planning' meant, so mentorship is vital. I remember that one of my main motivators that drove me while studying for my [certified financial planner] exam was the idea of being a positive example for young Black students and professionals to look to for hope and inspiration. The old saying goes, 'If he/she could do it, so can I.'"

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Besides Bentley, the list of CFP Board-registered programs partnering with Commonwealth includes one HBCU, Delaware State University, plus Texas A&M University, Texas Tech University, Virginia Tech University, University of Akron, Temple University, Bryant University and Utah Valley University. The program began at Bentley last year with the assistance of Commonwealth advisor George Raftopoulos of Portsmouth, New Hampshire- and Kennebunk, Maine-based Nvest Financial. Like a decent number of advisors who moonlight as college professors or vice versa, Raftopoulos is a lecturer in Bentley's planning program.

Commonwealth and the respective programs will use a directory of the aspiring advisors and other wealth management professionals that's accessible via the company's advisor desktop to connect job seekers with potential internships or other employment opportunities. In addition, the company will send advisors or corporate employees based near the schools to visit at least two or three times a year for guest lectures, meetings, job fairs or webinars. The company is asking students and faculty to attend its annual conference next month outside Denver; there, they will be able to meet advisors and leave with leads for potential jobs. The firm aims to create career paths that are different from the traditional industry sales-driven training, Israel said.

The program reflects "our support for development in an independent model," he said. "We want to help and support them on that professional track."