As a result of four financial advisors
The
“A lot of firms always said that they just didn't know where to get the talent from,” Rosa said. “It was amazing to hear that these candidates were really top notch.”
More than half of the interns have found full or part-time jobs with the RIAs — a much different pathway directly into the independent planning profession than the usual route by way of brokerage training programs. With cold calling and tapping a prospective advisor’s friends and family often cited as a barrier to the profession for underrepresented groups and young people, planners themselves are leading the way straight into independence for aspiring professionals.
Between programs such as the BLX Internship, the FPA Virtual Externship, new scholarship partnerships with RIAs and the CFP Board’s Center for Financial Planning, as well as Wall Street Bound, new doors are opening to bypass the traditional opening into the industry through employee brokerages.
The nascent efforts of recent years are starting to address one of the biggest problems, which is that “nobody knows where to go to look” for information on breaking into the profession outside the traditional brokerages, said Dominique Henderson, the founder of Dallas-based DJH Capital Management and the
“The overwhelming marketing message that is sent is the AUM grab — unfortunately, that alientates consumers of financial services and would-be providers of financial services,” he said. “I’m more concerned with pushing people towards the independent model. I personally believe that the AUM grab, the old brokerage wirehouse model is broken or obsolete.”
Nearly three dozen recent college grads and career shifters have used Henderson’s coaching, mentoring and networking service for starting a career in planning and more than 10,000 subscribers on YouTube follow his “Conversations For Financial Professionals”
Numeric possibilities
Advisors like Henderson are disrupting the profession’s demographic challenges. To begin with, almost half of CFPs are at least 50 years old and a slightly higher share of them are 70 or above than the portion in their 20s,
The numbers explain why it’s not possible to alter that picture “without having a conversation about wealth and inequality in America,” according to Troy Prince of
Wall Street Bound’s team has been hearing from more wealth managers since its launch three years earlier and is “happy to have that conversation” with firms aiming to go beyond statements with real resources for building new pathways into the profession, Prince said. He cited how tough it can be for many people to sustain a new career through the traditional approach.
“After a certain amount of time, it's eat what you kill,” he said. “If you don't have that support, if you don't have that network, you don't make it.”
The industry has “a huge evolutionary need” to change its entrance paths, considering that many programs are “about the same as they were 20 years ago,” said consultant Jeffrey Czajka of San Diego-based Advisor Growth Solutions. Independent practices have found more success than large wealth managers in hiring new entrants for tasks like paraplanning and onboarding, according to Czajka, the former head of LPL Financial’s Independent Advisor Institute.
“The individual advisor has the opportunity to drive their profitability and growth in revenue in a more meaningful way with that new advisor having a multifaceted responsibility role,” he said. “That role is extremely beneficial, but sometimes it takes more time to see that growth.”
New pathways
Now in its second year, the
“You have to commit so many resources to maybe get your foot in the door — what we're doing is we're shortening that,” Moore said. “We really take the training very seriously because we are training the next generation of planners and there is a level of rigor we expect in all the training that we do.”
With an eye toward future generations of CFPs, the certifying organization’s Center for Financial Planning is collaborating with two major RIAs,
The industry still has “a lot of work to do” in terms of opening more ways into the profession, according to Akeiva Ellis, a financial education specialist with the firm and a winner of Financial Planning’s
“By the time I sought to enter the profession, I had learned how to differentiate between actual financial planning roles and what are essentially sales positions,” she said. “I decided to work for a fee-only firm and looked for roles that paid a salary and not commissions. That way, I could focus on learning and doing my best work without the pressure of needing to put food on the table.”
A partnership with NAPFA, pro bono matchmaking for interns and RIAs by Advisor Business Solutions and firms like Abacus Wealth Partners helped more aspiring planners learn the profession without any sales requirements this past summer through the BLX Internship. Rosa and fellow co-founders Chloé Moore, Emlen Miles-Mattingly and Shawn Tydlaska recently held a meeting at the offices of startup custodian Altruist to discuss their plans, he said. The nonprofit BLX will ask participating firms for a donation next year to sustain and grow the program.
“This is more direct into planning itself, which is part of the whole idea behind it,” Rosa said. “This created a lot of opportunities that are not sales-related.”
BLX, the FPA Externship and RIAs like San Francisco-based Yeske Buie, along with some other innovators, are giving more prospective advisors a chance to go independent right from the beginning of their careers, said Henderson of Jumpstart.
“I look at this industry as, we need as many good people in it as possible,” Henderson said. “Good financial advice changes family trees and everybody deserves the opportunity to change their family trees.”
