The Financial Planning Association says that by the year 2028, our country will face a 200,000-person shortage of financial advisors. Demand will far outstrip supply both in terms of clients and practices which need to hire advisors to grow their business.
There are multiple reasons for this shortage – as wealth transitions from generation to generation, fewer people are becoming licensed than in the past. In today’s job market, there are so many different career paths people can take that traditional options such as becoming a financial advisor may be less desirable.
Given these factors, it can be difficult to find worthy candidates when you are ready to hire an advisor. Here are a few thoughts on how to go about hiring a financial advisor for your practice.
Before you start the actual process of hiring, make sure you have a solid rationale in place for why you want to hire. One of the biggest reasons you may want to hire is because your business is ready to grow, and you want your practice to be in a position where it can scale to handle a larger client load. One individual advisor will have limited capacity on their own, but as you put a team of advisors together, you can scale your business exponentially.
If you are planning to buy practices and merge them with yours as a means of growth, you must first build the infrastructure necessary to service the businesses you may purchase. That means having skilled advisors already on your team who can help you handle the load of new clients that you may be facing.
A second good reason to hire a new advisor is to create a succession plan for your practice. You want your clients to have the assurance they will be well taken care of when you transition out of the business or into a different part of the business. This gives them long-term stability, which can be an important factor as people choose a financial advisor.
This is part one of a three-part series on hiring the right financial advisors for your practice. Stay tuned for the next installment later this month.