Attempts to describe the shortage of next-generation financial advisors veer toward the dramatic: “Desperate Need,” Forbes reports. “Firms Struggle,” CNBC declares. “Dangerous Stockbroker Shortage Threatens America,” warns The Wall Street Journal.  

This isn’t entirely media hysteria. Statistics and anecdotal evidence corroborate the reasons for alarm. Both Pershing and Cerulli Associates researchers have produced studies in recent years showing that since 2004, more advisors are leaving the profession due to retirements than those joining it. Compounding the shortage, firms are having trouble replacing those who are departing and only a small minority of new advisor trainees — perhaps as few as 10% — remain with the firm that recruited them for more than four years.

In response, veteran advisory firm managers have made concerted efforts to identify prospective trainees who will not only learn fast, but also remain loyal. Managers successful at retaining talented trainees deploy a variety of tactics. Some larger firms have set up intensive group training programs and used an en masse approach. Other, smaller firms have spent time cultivating individuals who began their careers in other industries, but who are drawn to the wealth management profession.


But there are common denominators among all the firms that succeed at finding, hiring, and retaining trainees: They consider and remain open to candidates with lots of life experience  and they ensure that their firms clearly identify promising career paths for trainees from the get-go.

Brightworth, an Atlanta firm with $1.3 billion in assets and 27 staff members, embodies this approach. To ensure access to the best newly minted graduates, the firm provides scholarship money to a nearby university’s CFP academic program. 

But Brightworth doesn’t just rely on recent grads to fill its pipeline. Ray Padrón, Brightworth’s president, favors applicants who have previous work experience. 

Often, he notes, the best trainees are not millennials, but applicants with more birthdays behind them, who are seeking a career change.

When Brightworth has hired trainees directly from a CFP program, the learning curve has sometimes proved steep. “The first three years are really hard,” Padrón says. He finds “paying a little more for someone who has previous experience in, say, a technical part of the financial services world, is worth it.”

Clear milestones and objectives are set out for all Brightworth trainees, regardless of their background. “We start with the premise that all advisors will become owners,” Padrón says. Then Brightworth’s managers lay out the specific competencies that a trainee, and later an advisor, must demonstrate to advance their careers to the next level.

Padrón makes sure the trainees understand: “There is no queue. You don’t have to wait for someone to leave,” he says.

And there is no one set way to get ahead. For instance, Brightworth managers recently promoted two advisors who had started as trainees whose styles differ dramatically from one another. “We are not trying to clone anyone,” Padrón says. “We want people to be successful as their authentic selves.” 

Like Brightworth, the Abacus Planning Group in Columbia, S.C., uses a structured leadership pipeline to retain new talent. According to Charles Flowers, who heads the investment team at the 25-person, $836 million advisory firm, Abacus defines levels of achievement and then spells out the qualifications, skill sets and experiences required to reach each level.

Flowers seeks trainees who are intellectually curious in the belief that, when they are paired with the firm’s culture “that encourages and rewards constant learning of new things,” they will become both successful and committed to Abacus for the long term. 

At United Capital, managers have dramatically defied the wealth management industry’s typically paltry retention rates that hover between 10% and 30 % for trainees. The Newport Beach, Calif.-based firm, which has 74 offices nationwide and $15 billion in assets, holds onto about 90% percent of its trainees, according to Brandon Ross, a United Capital managing director. 

At the heart of its retention effort is a training center that the firm refers to as “a boot camp without the fatigues.” This 20,000-square-foot facility was launched three years ago in Dallas, where Ross works. 


“Training center supervisors don’t play reveille or demand push-ups of new recruits, but they do put trainees through an intensive program designed to both shape them as advisors and commit them to the firm,” Ross says. “Many United Capital recruits are recent college grads with finance-related degrees, but some, including many of the most successful, have logged a few years with a previous employer in another industry. “

As United Capital trainees, they receive a salary, but they also earn a bonus for providing client leads, which they turn over to the firm’s other advisors. These veteran United Capital advisors eagerly help mentor the trainees, because they know they are coming to help them build their practices.” 

At San Diego-based Creative Capital Management, co-founder Peg Eddy says: “We hire for values and train for skills.” 

By that, Eddy means that she and husband Bob Eddy, the other co-founder of the $300 million AUM advisory, don’t troll CFP programs for prospective hires. Instead, they pursue candidates with experience in other fields.

The Eddys also encourage prospective trainees to interview with other fee-only firms, so they have a basis for comparison. And they hold multiple get-to-know-each-other sessions, during which they carefully describe the job and its responsibilities to the prospective trainees.

One particular new recruit was told that if he completed his CFP training within two years after joining Creative Capital, the firm would reimburse him. He not only earned his CFP designation within the time allotted, but now the Eddys hope he will take over the firm once they retire. 

Similarly, the most successful trainee hires at Cadent Capital in Dallas, have been people who already worked in industries related to finance. “A good place to look for candidates is among mortgage loan officers,” co-owner Lynn McIntire. “They are used to detail.”

Based on past experience, she steers clear of candidates with backgrounds in the medical and legal fields. 

To evaluate candidates, McIntire relies upon exams developed by HR consulting firm Kolbe that measure natural instincts. She also asks the prospective hires to complete sample work tasks and spend a day shadowing a Cadent advisor. During their introductory visits, McIntire also asks them to engage in role-playing: The candidates interview one of the firm’s managers posing as a prospective client.

Like other advisory firm owners, McIntire subscribes to the theory that a clearly identified career path inspires loyalty among trainees. “I think it is important at a small firm, when new hires are going to work with the same four people,” she says. “They need to know what their progression will be.” 

Her tactics have worked. “We still have the first person we ever hired, and he is now a 15% owner of our business.”   

Miriam Rozen, a Financial Planning contributing writer, is a staff reporter at Texas Lawyer in Dallas.

 Read more:


Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access