Success in wealth management is not uniquely limited to experience or age. Often, it’s the result of an intentional combination of behavior, environment and personality.
An aging advisor population has highlighted the need to increase the ranks of next gen advisor talent. The problem is that FA training programs – previously the dream of many college graduates and freshly-minted MBAs – have taken a back seat to Silicon Valley startups. To be sure, only a quarter of today’s advisor population is under the age of 40, and a mere 10 percent are under 35, according to research by the CFP Board and Cerulli.
In the past, wirehouse training programs served as the traditional breeding ground for next gen wealth managers—providing a launch pad for many of today’s top advisors. Yet there seems to be less emphasis on the programs, and the bar to matriculate out – that is, achieving aggressive asset and client acquisition goals – has been raised considerably.
While the overall next gen population itself may be down, those who make it are reaching heights unseen in generations past—and are fueling growth in both brokerage and independent firms.
What are the lessons to be learned for aspiring advisors? To explore this, I interviewed a cohort of these high achievers and found there to be 5 common threads in their behaviors, environments and personalities.
- Differentiate with credentials
Unfortunately, advisors are unable to control prospective clients’ biases towards their age and experience. However, one advisor from a boutique firm said that pursuing meaningful credentials – such as the CFP, CFA, or CPWA – helped establish him as a domain area expert while positively impacting perception. - Become a student of the industry
“Especially at a young age when you don’t have gray hair or a long resume, mastering all aspects of the business – tax planning, investments, estate planning, employee benefits, and college savings – becomes critical,” shared Michael Henley, recent Merrill Lynch breakaway and CEO of Brandywine Oak Private Wealth. For instance, while Michael was at Merrill, he studied the particulars of a local Fortune 500 company’s employee benefits program and built a solid business around serving their key employees. - Work hard…and then work harder
Success comes in many different forms, so remember it isn’t all about close rates and net new assets, but rather what proactive steps you took in a day to get in front of the right people, enhance your clients’ lives, or better equip yourself to deal with future challenges. As one wirehouse advisor put it, “Always work harder than the person next to you and be ready to roll up your sleeves, remain humble, and pay your dues.” - Being a part of a winning team
Undoubtedly, partnering with the right individuals – those who will give selflessly and invest the requisite time to serve as a mentor – is a common theme amongst today’s high achievers. According to Justin Winters, a Managing Director at Hightower’s Treasury Partners, joining a strong team took many of the early pressures of building a business off his plate and allowed him to solidify a foundation, as well as increase his confidence, by tapping into over 3 decades of investment and client-facing experience. And the benefit extends to the entire team: Each member is able to add unique value to client relationships and business development. Justin, for instance, created his own next gen program to interact and connect with the children of existing clients and millennial prospects. - Succession opportunities
Many young advisors gravitate toward succession deals with senior advisors approaching retirement. While the right opportunity could be a game changer, don’t expect it to fall in your lap. “Build your business as if all growth will be organic, yet be ready to opportunistically jump on the right acquisition scenarios,” shared a UBS advisor who is in line to take over a business.
For up and coming advisors, the reality is that there is no “magic bullet” or strict blueprint for success. However, following the wisdom and lessons learned from top generational peers can guide your decisions and lead you in a positive direction. While the right environment is certainly part of it, controlling the controllable – such as knowledge and determination – is how many find success.
And for advisors and business owners seeking next gen talent with real promise, keep a watchful eye for those who demonstrate these common behaviors—therein lies great potential for the future.
