© 2019 SourceMedia. All rights reserved.
Voices

It's time to rethink advisory industry career progression

Keeping talented young recruits in place means creating the right balance of learning with realistic expectations for the timing of career advancement.

We’ve reached the point in the financial advisory industry’s evolution where we need to move beyond the kind of ad hoc career development that has previously defined the advisory career track.

In the past, advisory jobs advanced and progressed as the firm grew — without any systematic management or guidance. Historically, it has taken 10 to 15 years for a junior advisor to progress to senior level position. Now, the industry is more mature and diverse and in need of a more disciplined and purposeful career management process. I am seeing a change in the timing of career progression for the advisory track. What once was a decade-or-longer process is now a five-to seven-year progression.

kelli-cruz.gif
"For smaller firms that do not have a dedicated CTO, I find the roles of IT manager, database manager and portfolio reporting specialist take its place," says Cruz.

Moreover, millennials, who grew up in a faster-paced, social media-driven world, have taken over the job market and are simply not wired to wait as long as previous generations of advisors did to excel in their careers. According to the Manpower Millennial Careers: 2020 Vision report, while millennials do place a high priority on the security of full-time employment, they also want flexibility, new challenges, and advancement. According to that study, millennials want new opportunities with their current employer — 63% intend to stay with them for the next few years or longer. However, when asked what the “right” amount of time is to stay in a single role before being promoted, about two-thirds said less than two years and a quarter said less than 12 months — confirming their appetite for new challenges.

That means the challenge for today’s firms is creating the right balance of learning with realistic expectations for the timing of career advancement. I believe the answer lies in setting the right expectations for your employees from the beginning, starting with the recruiting process. The other key is ensuring that once that talent is hired, that there are sufficient options for learning to keep employees engaged and committed to the firm’s long-term success.

But aside from millennial impatience, why are we seeing this shortened timeline? A great deal of credit goes to the emergence and success of the personal financial planning programs, and the preparation they give to young advisors entering the job market.

According to Financial Planning’s 2018 annual survey of colleges and universities that offer CFP Board-registered degree programs, there are more than 102 such programs around the country. They have been extremely successful in attracting and educating talent for the advisory industry. Students not only gain industry knowledge from the excellent curricula provided by these institutions, they add to their education through internship programs. Some undergraduates start in their sophomore year and continue to gain practical work experience until graduation.

Yonhee Gordon, principal and COO at JMG Financial Group in Chicago, has seen the advisory career track timing shortened. She attributes this acceleration to several factors, one of which is the firm’s strategy of hiring graduates from PFP programs into an entry-level role of financial planning associate. These already experienced recruits hit the ground running from the start of their tenure with the firm.

Another integral part of JMG Financial Group’s recruiting efforts is to create awareness of a career path in the industry by inviting local students to their office to spend the day with employees of the firm and learn about the industry as a whole. The firm is also very committed to investing in technology, which can free-up time to focus on the higher-value activities that create a more challenging and engaging employee experience.

Brokers-traders-financial advisors-training-portfolio management-computers Bloomberg News
A financial trader points to data displayed on computer screens . Photographer: Akos Stiller/Bloomberg

“Making JMG Financial Group a top place to work is fundamental to our ability to provide consistency and drive results. Since our founding in 1984, we’ve worked to attract and retain a talented team that is deeply committed to our clients. Creating bench strength and depth in the advisory ranks is key,” states Gordon.

Creating bench strength is an important principle for any firm that has growth as a key strategic initiative. And in order to grow, you need talent. We can learn a lot from professional sports organizations in this regard.

Take, for example, my favorite basketball team, the Golden State Warriors. Its success over the last five-year NBA finals run was largely built by developing young talent over time. Three of the starting five players were original Warrior draft picks and it wasn’t until the organization was well into its championship run that they recruited MVP Kevin Durant. Although the Warriors did go on to win two championships after Durant joined the team, his recent departure shows us that no amount of money will keep a team member onboard if they are unhappy and not a cultural fit. The Warriors’ winning culture comes from select recruitment and relentless training, augmented with the occasional experienced recruit to round out the bench.

Another part of building a strong bench is the training and development process. I recommend developing and implementing a well-defined career path that outlines a plan for progress, development and growth over an employee’s career — one that covers the progression of capabilities, skills and experience.

Many of the prospect calls I have received over the past 12 months are generated by a need to create a career path for the employees in the firm. In some cases, firm leaders feel the need to create a separate career track for every role in the firm. One of my clients, for instance, wanted to create a separate career path for a dedicated data management/technical role even though there were no plans to add technical jobs in the future.

I encourage my clients to think of career progression as a traditional apprenticeship program within the financial services industry.

Undoubtedly, it is easier for larger firms to offer defined paths of career progression. However, at smaller firms job roles are typically blended so employees get the opportunity to learn the functions of the firm quickly. Additionally, because roles are not specialized, everyone must pitch in and do whatever it takes to service clients.

I encourage my clients to think of career progression as a traditional apprenticeship program within the financial services industry. I call the first phase of the path the Financial Planning and Investment Management Apprenticeship. This encompasses the roles of operations and client administration, support advisor and the introduction to servicing clients. Phase two is the Relationship Management Apprenticeship, which then progresses to include Business Development and Leadership Apprenticeships. Along the way employees are learning different skills and gaining experience that eventually can lead to running the firm with other partners. I believe that clarifying and explaining the apprenticeship pathways will meet the desires of today’s new talent.

It’s time for firms to reimagine their talent management practices, and to remember that career progression doesn’t always have to mean promotion. Climbing the proverbial career ladder isn’t as up-and-down as it used to be; sometimes you also have to move left and right.

For reprint and licensing requests for this article, click here.