Unique Residency Program Trains a New Generation of Advisors

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A need for higher-level support than interns could provide and a desire to help bright young people develop into full- fledged financial planners were the motivations behind a unique training program at Cornerstone Wealth Advisors, Inc. in Edina, Minn.

The program is based on a medical residency, according to Michael Branham, a financial planner at Cornerstone, and provides three years of on-the-job training. However, unlike other training programs, he said, the trainee in Cornerstone’s program is expected to actually leave the firm after that three-year contract is up.

“That’s why we call it a residency, and not just a paraplanner position,” Branham said.

He came up with this idea when the firm realized that they needed more help but did not want to hire another full-time planner at the firm, which manages about $150 million. “We needed additional staff and we were using interns,” he said. “Those interns were great but they didn’t have the financial planning background that our resident has.”

In addition, he said, “We recognized the need in our profession to have an avenue for young planners to come in and get the experience and knowledge they need,” he said. Many graduates with financial planning degrees must choose between going with a large firm or getting a job as a paraplanner with no guarantee of when or how they will become a full-time planner.

It was that promise – that she would be a full-time advisor in three years – that led Christine Damico, Cornerstone’s first resident, to take the job. “It’s a three-year contract, and at the end of the three years I have to go somewhere else and find a different job,” she said. “But at the end of these three years I’m going to be a full-time advisor.”

Damico is a 2010 graduate of Virginia Tech, with a bachelor’s degree in finance and a concentration in financial planning. She said she considered other jobs, but none of them could guarantee that she would be a fully trained financial planner. She knows friends from her program who have taken jobs in financial planning but many of them will still be an associate planner or a paraplanner in three years.

She also said that this job gave her the opportunity to move away from the East Coast, where she’s always lived, but without requiring that she stay in Minnesota if she chooses not to at the end of the residency.

The three-year length of the contract is no accident, Branham noted. Not only will Damico be able to take her CFP exam during her time at Cornerstone, she will have also completed the three years of work experience that are required to be a full-fledged CFP.

In addition, the planners at Cornerstone intend to help Damico find a new job at the end of her residency, an added perk.

“We’re committed to ensuring that not only does she get good training but that we help her with opportunities once her time with us is done, “Branham said. He added that he’s already had advisors he knows at other firms ask about potentially hiring her, which only reinforces the need for this kind of training program.

Branham feels this residency program could be a model for other advisory firms. However, he said, such a program may not be for everybody. Some advisors ask, “why would you spend so much time training somebody and then launch them?” he asked.

Some firms really want to keep people after spending time and energy training them, while others do not enjoy the training process. “I think planners in general are very busy people and I think when you’re running a business it’s not easy to make the commitment to say we’re going to devote resources to developing young people who are going to leave.”

However, he said, he feels it is the responsibility of the financial advisors currently practicing to find a way to make sure there are competent advisors in the next generation. Too often there is not a clear career path for aspiring planners.

“I would have liked to have this opportunity when I was younger and learning the ropes straight out of college,” Branham said.

Becoming a financial planning resident is also not the right choice for every aspiring planner, Branham noted. The best candidates are self-starters, people who are not afraid of having to look for a job in three years, he said. Grads who see themselves starting their own firm but realize they need intense training to be successful could also be a good candidate for this type of position.

Since Damico is the first resident at Cornerstone the firm is developing the program as they go along, gradually giving her more work to do and a bigger role with clients. And in three years?   
She’ll move on and Cornerstone will be looking to the financial planning programs at colleges for the next aspiring planner to train and launch.

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