2023 started with tens of thousands of tech layoffs and news headlines today are filled with warnings that the financial services sector is gearing up for some of the biggest workforce reductions since the 2008 financial crisis. Change creates opportunities, and in an economic environment amid uncertainty like we’re experiencing now, it’s time for the independents to lean in and capitalize to recruit top talent. Let’s examine a few trends and how they might influence your business development strategy to accomplish this.
Entrepreneurs Are Born Out of Necessity
Job loss, frustration over someone else controlling your destiny, the need for supplemental income in a shaky market, and a now-or-never ah-ha moment…are all common reasons often cited by entrepreneurs as the catalyst to their journey. While world economists continue to debate whether we are heading toward a recession this year, it’s important to recall patterns of our most recent downturns where new business applications surged. In 2021 and 2022 alone, more than 5 million new business applications were filed, and the U.S. Census Bureau also saw more new business applications during the summer of 2020 (amid the COVID recession) than at any time in the past 15 years prior. 1 Entrepreneurs are often born out of necessity and with job uncertainty on the horizon, new career paths will be too.
Financial practices owners positioned to thrive in a downturn will be looking to capture talent on the move. Highlighting the fundamental advantages and benefits of being an independent advisor is often a great place to start career conversations. This can make all the difference regardless if you’re speaking to a wirehouse advisor finally taking the leap to independence or a rising star in the business world you see as a future successor. Here are a few key points based on what our community of advisors will typically share as what they love most about this profession:
- More Americans than ever need sound financial guidance and being a financial advisor is a truly noble career and one where you can make a positive difference in the lives of many. This resonates even with seasoned advisors as it’s the inspiration behind why many of us work in this field.
- Seeking flexibility? Independent advisors have the flexibility to set their own schedule and with today’s technology and security protections, working remotely or in a hybrid capacity is easy to accommodate.
- Craving compensation? Independent advisors have unlimited income potential. Glassdoor offers some further insights into the average salaries of investment advisor representatives that might be helpful to have ready for these types of conversations. Experience, licensing, and other relevant factors will influence this, of course.
- Independence means that you’re not forced to sell proprietary products, nor are you necessarily answering to someone else’s sales goals or process.
The Reassurance of Support
By definition, being independent is often described as not relying on another. While you will need a bit of grit to trust your own abilities, judgment, etc., the truth is that our profession offers a great deal of support. If you’re a full-service financial practice recruiting an advisor, will you offer an established brand and support team, office space, and perhaps even coaching? How frequently will you meet to discuss progress and what are you offering in terms of support? Defining this upfront can provide the reassurance someone needs to take a leap for a new career journey.
Specifically, at Private Advisor Group, we offer a variety of partner relationships and we can serve as that liaison for opportunities like finalizing offer letters, helping to obtain specific product approvals or concessions, or making connections to niche resources to help with growth. Resource navigation during a transition is a lot, so take the opportunity to offer reassurance and a calming influence.
Another trend we’re watching closely is from a recent study that found “one of the most crucial support sources for entrepreneurs and small business owners is their social network.”3 In a remote world, fostering a sense of social belonging is crucial and that’s why we frequently highlight the touchpoints and engagement opportunities available to recruits. A simple but often overlooked example here is conferences and continuing education support. For us, the Private Advisor Group’s Annual Conference is around the corner in Charlotte, NC, on April 23-25. With a theme of “fostering community,” the conference brings our entire community of financial leaders together for networking, inspiration, and continuing education, and it has an incredible social element – just ask anyone who has attended our famous Wings-N-Things event.
There are many puzzle pieces behind the scenes that go into onboarding an advisor successfully and knowing a team is there to properly prepare, network, and aid in a transition will make all the difference.
Don’t Overlook and Undersell Key Differentiators
You know your firm’s value proposition, you know where you shine, and you know where opportunities exist based on our current business and economic environment. Don’t shy away from sharing this with your prospective recruit. And, don’t be afraid to bolster your strengths by highlighting the strengths of partner firms you may be affiliated with. This encompasses everything from civic and nonprofit groups to RIA or broker-dealer affiliations. A well-connected and well-resourced workplace is highly attractive. Highlight your history of success and showcase where you’re heading next. Those who connect with your story and unique differentiators will typically thrive within your culture.
With change on the horizon, leaders in our profession that are prepared to illustrate why their firm may make the next best home for a financial advisor will be the ones best positioned to capture that talent. And, if you’re a financial advisor considering making a move this year and want to discuss options, let’s connect.