I believe we are at the point in the 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 10-15 years to grow from a junior advisor to a senior level advisor. Now, the industry is more mature and diverse, and in need of more a disciplined and purposeful career management process. Moreover, Millennials have taken over the job market and they are not wired to wait as long as previous generations of advisors did to excel in their careers.
Growing up in the faster-paced world of social media, Millennials see their careers through the same lens. 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 this study, Millennials want new opportunities with their current employer — 63% intend to stay with their current employer 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. 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. which starts during the recruiting process for talent. The other key is ensuring that once that talent is hired that there are sufficient options for learning that keep employees engaged and committed to the firm’s long-term success.
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 5 to 7-year progression. Why are we seeing this shorten timeline? Most, if not all of the credit goes to the emergence and success of the Personal Financial Planning (PFP) Programs, and the preparation these programs give to people entering the job market. According to Financial Planning’s annual survey there are over 102 CFP Board-registered degree programs around the country. These programs have been extremely successful in attracting and educating talent for the advisory industry. Students are not only gaining industry knowledge from the excellent curriculum provided by these institutions, they are adding to their education through internship programs as well. Some students are starting internships in their sophomore year and continuing to gain practical work experience until graduation.
According to Yonhee Gordon, Principal and Chief Operating Officer at JMG Financial Group In Chicago, they have seen the advisory career track timing shortened. She attributes this acceleration to several factors, one of which is their recruiting strategy of hiring graduates from PFP programs into their entry-level role of Financial Planning Associate. These experienced and well-rounded 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. It is not surprising that JMG Financial Group was named One of the Best Places to Work, in 2018 & 2019 by InvestmentNews. “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. In order for a firm to grow you need talent that can take on clients and rise to the challenges of the industry. I think we can learn a lot from professional sports organizations in this regard. Take for example, my favorite sport organization the Golden State Warriors Basketball team.
The Warriors success – over their past 5-year NBA Finals run – was largely built through creating “bench strength” 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 their championship run that they recruited an MVP player, 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 if they are not a cultural fit and unhappy. 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 having a strong 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. A career path should cover the progression of capabilities, skills, and experience. It should include the opportunity for employees to move laterally, in addition to the more traditional approach of “moving up” in the organization hierarchy.
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, they feel the need to create a separate career track for every role in the firm. For example, one of my clients had a dedicated data management/technical role that they wanted to create a separate career path for even though there were no plans to add technical job roles to the firm in the future.
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 are offered 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: to begin the career path as an advisor the first phase of the path is the Financial Planning and Investment Management Apprenticeship. This encompasses the roles of operations and client administration, support advisor and the introduction to servicing clients. The next phase is the Relationship Management Apprenticeship that 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.
Kelli Cruz is a Financial Planning columnist and the founder of Cruz Consulting Group in San Francisco. Email her at kelli@cruzconsultinggroup.com or follow her on Twitter at @KelliCruzSF
