How a multi-stage training program could bridge the advisor talent gap

As wealth management firms compete for top financial advisor talent and confront the need to recruit aspiring professionals, one company launched its potential solution to those problems.

New York-based Affiliated Advisors started its Synthesis Advisor Program earlier this month with two goals: doubling its current size of $5 billion in client assets under administration as an independent branch of Osaic, and designing forms of training and business growth services that fit professionals at different stages of their careers, said Managing Director Trisha Qualy. The finding last month from research and consulting firm Cerulli Associates that more than 70% of first-year advisors fail out of the industry within five years confirmed the necessity of developing "a very clear program" for training and professional development, she said in an interview.

"To me, it was just such a shocking number that I felt very compelled for us to take a bigger move in this direction as a firm," Qualy said, explaining that the program comprises training for aspiring professionals, coaching for breakaway transitions and consultation on M&A, expansion and succession planning. "We hadn't formalized a program until now," she added. "We have three phases, or three ways that advisors can take advantage of Synthesis."

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Cerulli's estimate came just before another pertinent calculation from consulting firm McKinsey & Company this month that the rising demand for wealth management services will leave the industry short of 100,000 advisors required to serve those possible customers by 2034, noted Jodie Papike, the CEO of independent advisor and executive recruiting firm Cross-Search. Affiliated's program reflects the pivotal role of offices of supervisory jurisdiction in independent channels and the way that advisor training is changing to fill a vacuum left as traditional industry paths into the profession turn increasingly obsolete, she said.

"OSJs are a really important part of recruiting, and the reason why is because the really good groups have multiple things that set them apart. They have to think outside the box and be creative and really find a niche," Papike said in an interview. "It just makes me think about the most successful OSJs and the way that they can do that. Affiliated Advisors has been around for a very long time, so they're very knowledgeable, and they're successful."

Three stages for advisor growth

Qualy created a structure for the program that reflects the simple fact that aspiring professionals (including career changers), newly independent advisors and experienced planners trying to reach a larger footprint are searching for disparate kinds of training and business development, she said. The company calls the three cohorts of the program "EntryPoint," "LaunchPad" and "GrowthCatalyst." Out of roughly 100 advisors in Affiliated's network, about 35 fall into one of the three categories, and Qualy and other members of the team led by her, Managing Partner Tom Rippberger and President Rita Robbins intend to boost the firm's ranks of new and longer-tenured advisors by emphasizing the firm's training and coaching resources.

The EntryPoint group will have internships or W-2 employment with Affiliated or existing advisory practices in the branch that include mentorships and experience "to help young people understand that there are many paths to success in this industry," Qualy said. 

The LaunchPad participants (with about five to 10 years of experience) will get practice management, business coaching and other services for advisors who are "realizing that they don't want to stay with that captive firm" but also find that "taking that leap into independence can be very unsettling for an advisor who doesn't have the right path and the right guide," she said. 

And the third phase, GrowthCatalyst, will cater to advisors with 15 to 20 years of tenure by aiding their client lead generation and support processes and identifying potential M&A and succession opportunities across Affiliated or outside in a manner that could assist them in standing out in a competitive market for deals.

"They're at that point of their career where they're trying to figure out, 'What am I really trying to build?'" Qualy said, noting that Affiliated has been boosting its own expertise in M&A by facilitating about 20 transactions involving advisory practices with $600 million in client assets changing hands within the past five years. "We want our next-gen GrowthCatalyst advisors to be at the top of the buyer list when deals are presented to them," she added.

Affiliated and other independent firms are trying to step up their training efforts to address the industry's succession challenges from looming advisor retirements and the historically difficult barriers to entry into the profession, Papike said. 

"Our industry, on the independent side, has really, in my opinion, done a terrible job of thinking about the next generation and thinking about ways to bring in younger advisors and give them ways to get them training and get their feet underneath them," she said. "There's this void for how young advisors can not only just get into this business, but how they can make it."

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A multigenerational approach to advisor training

As a firm with private, multigenerational ownership "that helps us make better decisions" with one millennial, one member of Generation X and one baby boomer working together atop the company, Affiliated could point to its own structure as an example for the next generation of professionals, Qualy said. The resources of Osaic as a "very strong broker-dealer partner" with an executive "champion" for next-generation programming in Head of Corporate Strategy Dimple Shah figured in Affiliated's design of Synthesis as well, according to Qualy, a member of Osaic's national council for early career advisors and professionals. And Affiliated's predominant composition of advisors operating their businesses as the sole practitioner adds another layer to professional development services that bridge the generations.

"Younger generations really appreciate and prioritize collaboration, and we're very proud of the community that we have built here at Affiliated Advisors," Qualy said. "I can't say for certain if that would have been as attractive 20 or 30 years ago, but right now, a key part of our value proposition is that community and that collaboration."