Why It’s Hard to Hire Good Investment Advisors (And What You Can Do About It)
Finding good talent is not easy in any industry. However, investment advisory firms are having a tougher time than most. Low unemployment rates, shifting candidate priorities, and a lack of skilled talent — among other factors — are driving a staffing shortage that’s leaving firms struggling to reach their business goals.
Below we explore why it’s so hard for investment advisories to find new talent, and strategies for overcoming this major challenge.
Why Hiring Talent is Harder Than Ever
Demand for investment advisors is higher than ever before, with the Bureau of Labor Statistics forecasting new advisory jobs to grow 13% by 2023 — four times faster than the 3% increase projected for all other occupations over the same time period. Many existing positions are also beginning to open up as more experienced advisors retire — one-third are planning to exit the workforce during the next decade.
In addition, clients today are more conscious than ever of ethical considerations and social responsibility. This requires advisors who know how to incorporate environmental, social, and governance (ESG) factors into their investment strategies. On top of that, the rise of robo-advisors and artificial intelligence (AI) is reshaping traditional roles within the industry, and requires professionals with diverse skill sets.
Finding advisors with the specialized knowledge and skills needed to meet these needs can be highly challenging.
All of these factors, combined with low unemployment rates, have created an intensely competitive market with candidates receiving multiple offers. This environment combined with inflation is driving record compensation increases as firms try to outmaneuver their competition. One survey showed that firms need to increase salaries by 15 to 20% to stay competitive. But that’s not all they need to do.
COVID-19 has had a major impact on candidate expectations and priorities. Most of today’s job applicants expect the flexibility to work from home at least part of the time. They are also prioritizing work-life balance, and are seeking roles that have a clear path for professional development. Candidates also prize roles aligning with their values and beliefs, recognizing the big impact this can have on their job satisfaction.
This is a very tall order to fill — but it’s not impossible.
How to Find and Acquire Talent
While hiring good talent may seem harder than finding a needle in a haystack, there are some key things your firm can do to attract and hire top performers.
Develop a Competitive Compensation and Benefits Package
To ensure what you’re offering is competitive with other firms, take a look at industry benchmarks found in surveys from Fidelity, Charles Schwab, and others. It also might be helpful to look at sites such as Glassdoor, where employees self-report their salaries.
If you’re unable to compete on salary, consider an incentive compensation plan based on a percentage of AUM billing and revenue.
It’s also critical to offer a comprehensive benefits package, especially if you can’t effectively compete on compensation. A robust healthcare plan is a must — as is covering at least part of employee premiums.An Advisor Growth Strategies study shows that two-thirds of firms contribute to premiums. It also revealed that more than three-fourths of firms offer dental and vision coverage. Many companies are also now opting to offer unlimited paid time off.
Also consider perks such as gym memberships, food delivery accounts, and Netflix subscriptions. These little extras can make your firm rise above the rest when all else is equal.
Evaluate Company Culture and Career Development
Assess your company culture to ensure it aligns with the expectations of today’s workforce. If you don’t already offer a hybrid or fully remote work schedule, doing so can go a long way toward providing candidates with the flexibility they demand.
Examine your professional development opportunities and create defined career paths for specific roles if they don’t already exist. Candidates want to join companies they can grow with, so you should be able to explain what their career trajectory could look like if they choose to join your firm.
Conducting employee satisfaction surveys can be a valuable way to assess your culture and identify areas for improvement. Proactively addressing concerns will increase retention and help create a culture that’s attractive to job candidates.
Think Outside the Box
Consider looking for talent in new places. For example, other industries with adjacent skillsets such as accounting can significantly broaden the candidate pool. Accounting professionals often have a strong foundation in financial analysis, compliance, and attention to detail — attributes highly transferable to the advisory space. Training programs to bridge any knowledge gaps can provide the expertise needed for them to excel in the investment advisory role.
Create an Intern Program
Intern programs can be a very successful recruiting tool. They provide students and recent graduates with hands-on experience while allowing your firm to assess potential future employees. Check with your local college or university to see if they provide local businesses with interns. If partnering with a local college isn’t possible, there are many other ways to find interns including college fairs and posting internship opportunities on university websites and social media.
Learn More Strategies for Positioning Your Firm as An Employer of Choice
In the face of current hiring challenges, investment advisory firms must ensure what they offer is on par with the competition and find new ways to attract candidates.
Read our eBook to learn more about the factors influencing the investment advisory talent landscape and discover practical strategies for finding and retaining high-performing investment advisors.