Wealth management firms claim that the failure to plan for succession significantly hinders their growth. The increasing attrition rates among early-career advisors pose a challenge for employers seeking younger talent to take over, according to FinancialPlanning.com.
However, Milwaukee-based regional firm Baird believes that it has found a solution to the succession problem, which could serve as a model for other firms in the industry. Baird has operated two programs to recruit and train early-career talent for their private wealth management business.
The first program is the Financial Advisor Training Program, tailored for college graduates with at least three years of sales or relevant experience. The second program is the Foundations Program, designed for career changers from other financial services or industries wishing to enter wealth management.
In an interview, Anita Volk, the next-generation talent manager for Baird's Private Wealth Management team, emphasized the critical need to establish a firm pipeline of well-trained and licensed associates for succession planning. She pointed out that relying solely on children of Financial Advisors or close family friends to take over as successors for some teams is insufficient. Instead, firms should proactively identify and groom potential successors years in advance.
With the average age of advisors being in the mid-50s, many are expected to retire in the next decade or two, leading to numerous openings that cannot be adequately filled through informal means within the firm. Volk suggested that firms begin assessing and preparing candidates for succession approximately ten years before a senior partner's intended retirement date.
Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.
