Advisers grade their own recruiting a C, and they are right

Ask the people who run retirement-plan advisory practices to grade their industry's recruiting and the marks come back a D+, a C and a B- on PLANADVISER's webinar "Broadening the Appeal of the Industry." The spread among HUB Retirement and Wealth Management's Francisco Abril and Janine Moore and ClearSight Advisors of Raymond James' Rick Sauerman is the useful part: nobody on the panel thinks the entry-level pipeline works.

The pressure behind those grades is arithmetic: Cerulli Associates counts roughly 35% of all financial advisers retiring within ten years, which is why the firms on the panel describe developing the next generation as an operating need rather than a line item. For a practice with a senior consultant holding the client relationships, a first job posting is a succession question wearing a recruiting costume.

Sauerman's version of the pitch skips compensation, arguing on the webinar that money will not be the big attraction for a new adviser; training and the opportunity to grow into the role confidently will be. The panel conceded why that is a hard sell, agreeing that entry-level advisers can be discouraged by how many years it takes to build a book of business.

Abril described HUB's answer as company-wide: talent development coordinated nationally, with mentorship and internship programs run from the CEO through regional leadership and the human resources team, not whichever office does the hiring. That is a payroll commitment, and it is the kind of program that fits easily on a slide and awkwardly in a budget.

Moore supplied the retention half of the argument: after more than three decades in the business, she said the most fulfilling thing in her life has been watching people she helped early in their careers retire with dignity, and she framed the recruiting job as helping candidates see that arc before they have lived any of it.

Sauerman tied the industry's grade to whom it hires, arguing that plan participants are a diverse population and need advisers they feel comfortable talking to. Moore, who was held up early in her career as the "face of the new adviser," said she is still asked about that label, and the habit of hiring people who resemble the people already doing the hiring is a large reason the conversation has not moved on. The commercial case is not sentimental: by this publication's reporting, most of the $124 trillion transfer lands with women, and seventy percent of women have never met an advisor.

The firms that win the entry-level market will be the ones that fund mentoring and internships as a national program and treat the first several years as an investment with a known cost; the ones that lead with a payout grid will keep cycling through hires who leave before their books pay for them. The recruiting arms race repricing experienced talent is a separate market, where liftouts are bid in basis points of transition money; an entry-level hire is bought with years of training, which makes this the cheaper half of the talent problem and the half where a C average is genuinely embarrassing.

Abril's phrase for HUB's model, a nationwide effort, is the one worth stealing, and practices that can say it honestly about their own mentoring will be the ones able to name who inherits the retiring partner's clients.