The Value of Working with a Junior Financial Advisor

Even if your practice has many experienced advisors, it may be time to start thinking about the next generation. In fact, a staff of veteran advisors may be just the reason to consider hiring junior financial advisors. Given their skillset, unior financial advisors are uniquely positioned to contribute to the current-day and future success of your business.

According to a 2023 report by Cerulli, the number of financial advisors joining the industry is largely stagnant — and has been for several years for that matter. At 72%, the high failure rate of new advisors provides ready explanation for the stagnation. And with over 37% of advisors planning to retire in the next decade, there might not be a more opportune time to start cultivating a talent pipeline.¹

Benefits of Hiring Junior Advisors

Some financial advisors may think of junior financial advisors as simply administrative assistants, but that’s a myth worth dispelling. According to Cerulli, 40% of “rookie” advisors have prior financial services experience. Some may have more defined roles such as a paraplanner, service advisor, support advisor etc. while others may work in a broader capacity.

Whether researching and preparing for a client meeting, handling client follow-ups, or managing the day-to-day with clients, junior advisors can prove invaluable to your practice in four key ways – that ultimately can translate into growth.

1. Add efficiency and speed. Junior advisors are typically comfortable with digital platforms and social tools that can aid in the success of your practice. Maybe even more so than you or other advisors in the firm. These tools can help you attract new clients and spend more time with pre-existing ones.
2. Relate well with younger clientele. The demographic of financial advisors is aging, and whether you’ve noticed or not, potential clients are getting younger. Millennials, also known as Young Accumulators from a generational perspective, and younger customers are more likely to relate to an advisor closer to their age and life experience.
3. Free up your time. By taking over smaller accounts and newer clientele, junior advisors can allow you to focus on building and maintaining your personal relationships with clients. Additionally, younger advisors can bring in more assets and clients for your business.
4. Provide a succession plan. If you don’t already have a succession/transition plan or potential successors on the horizon, junior advisors offer an ideal solution. By mentoring them now, you can train them to run your practice the way you do and help ensure its long-term success after you step down.

Mentorship for Junior Financial Advisors

Clearly the benefits of working with junior advisors are attractive, but avoiding the 72% new-advisor attrition rate requires some mindful care. The 2023 Cerulli report found that a significant percentage of new advisors wanted financial advisor mentorship and training in these specific areas:

• 71% — financial planning
• 71% — investment analysis and support for the licensing process
• 64% — exposure to successful advisors
• 60% — mentorship from established advisors

It certainly stands to reason that businesses who incorporate a talent development mindset that includes these areas would be positioned for better retention when bringing new junior advisors aboard.

How to Attract Junior Advisors and What to Look For

While using digital platforms is essential if you’re looking to recruit junior advisors, there are many ways to find potential employees in this demographic. Online job boards including LinkedIn and Indeed have proven highly successful for younger professionals, so utilizing these is a good first step. In addition, consult your professional network for leads on prime candidates and consider participating in college career fairs. Placement offices can be a good option as well. Make sure to keep in mind salary and compensation considerations as well.

While interviewing candidates, consider the importance of soft skills vs. business skills in hiring decisions. While you can teach new employees the ins and outs of the financial industry, you can’t teach intrinsic alignment with your practices culture and values. Some soft skills to look for include:

• Integrity
• Strong work ethic
• Technical knowledge
• Problem-solving skills
• Values that mirror yours
• Willingness to buy into your long-term vision for the business

Once you find junior advisor candidates with the skills you are looking for, you can look forward to hiring an employee that can help you and your clients in the present, and the success of your practice in the future.