How to Hire Top Financial Advisors (In 2024)

Thread the Needle: How to Find the Best Financial Advisors

How do you navigate a talent pool where nearly three-quarters of new financial advisors fail within their first few years? Worse still, the pressure is on to continually be on the lookout for fresh talent as the market contracts with an estimated 100,000 financial advisors expected to retire over the next decade. The competition will be fierce to find the best people.

Do you believe your team is prepared to secure the top talent needed to thrive in this market? Has your recruitment process led to a high percentage of productive talent that stays for a career? It's three years later, and you’ve spent time and money recruiting and training new staff only to have them leave. 

Unfortunately, it is a reality today in our industry. This means a new approach to recruitment and employee nurturing and enrichment is required, one that will involve practically everyone on your team and affect every part of your business in a positive way.

This article walks you through insights and strategies from experts who continue to hire the right financial advisors for their firm's objectives.

Why Hiring a Financial Advisor Is Often Difficult

Over 37.5% of investment advisors are retiring in the next decade representing 41.5% of total assets under management, according to Cerulli Associates. The rookie advisor churn rate of about 72% means new hires are leaving within the first few years, highlighting the challenges in finding and retaining top talent.

The environment requires a new strategy for recruiting and nurturing talent for a successful career. Landing on the perfect formula for your firm's objectives and then executing it consistently will position you to choose and nurture high-quality financial advisors.

Recruiting Effective Financial Advisors: The Challenges

Identifying, attracting, and retaining great talent in this industry takes a different approach than most traditional positions. Not only can the common scatter approach be time-consuming and costly, but it also makes it difficult to secure the quality candidates we are all looking for. Inviting many candidates without the proper filters will take up more time than you and your team can afford.

Just because your company has the resources, doesn’t mean you should play the numbers game. We interviewed a handful of managers in the industry and found a common theme with those who have successfully built large, and / or loyal teams of advisors. 

The Traditional Recruiting Process

A manager at Equitable noted that out of 28 candidates, only one is typically onboarded. Some agencies do much better - 1 out of 3 - and then there are others who do worse, and it is correlated to a faulty process. Once they finally get their new hires, the 72% turnover rate will lead to additional costs as they start over. This is why it is crucial to refine the recruitment process so you identify quality without putting all candidates through your hiring process.

A traditional recruitment process normally includes the following steps:

1. Analyze the need: A job analysis is performed to define the role, including responsibilities and required skills.
2. Attracting candidates: Posting job openings on various platforms and utilizing professional networks.
3. Screening applications: Reviewing resumes and conducting initial phone screenings.
4. Interviews and assessments: Conducting multiple interviews and using various assessment tools.
5. Reference checks and offer negotiation: Verifying past performance and extending formal offers.
6. Onboarding and training: Introducing new hires to company culture and providing comprehensive training.

This process often falls short in today's competitive market. Firms need to adopt more innovative strategies to stand out and attract top talent. 

What Filtering Candidates Looks Like

The filtering process of potential candidates should go beyond screening for technical competencies; that is the bare minimum. You need to identify the qualities that will predict success in your culture and industry. No system we use or develop is a guarantee of success, but that isn't the goal. Your goal is to end up with a candidate pool that consists of more stars than not, so you and your team can confidently focus on the best choice.

1. Education Should Begin Before The Interview

Perhaps the most significant difference in your recruitment process will be the idea that employee education will begin before you get an initial interview. Farshad Asl, a Regional Director at Bankers Life and a seasoned leadership expert, champions the idea of live career briefings held multiple times a week. Serving dual purposes, they provide a filter for prospective new hires naturally while giving prospects a realistic view of what to expect in a financial services career.

"The biggest challenge is often overcoming preconceived notions about the industry. We have found that success attracts people. By focusing on demonstrating tangible results rather than just making promises, we effectively attract top talent."

Farshad Asl, Regional Director at Bankers Life, Executive Council Member, Leadership Expert

The briefings offer an accurate insight into what to expect as a financial advisor, helping those who wouldn't do well long-term to eliminate themselves from consideration by setting expectations upfront in a stress-free situation.

Similarly, internships are another effective pre-hire educational tool, as demonstrated by Hector Alexis Romo and Bennett L. Sperber III at Modern Woodmen of America. They emphasize the importance of giving candidates a taste of the profession through internships where they can learn from Certified Financial Planners (CFPs) without the immediate pressure to sell. This approach allows candidates to develop a deep understanding of the industry and assess whether it aligns with their career goals before they commit fully.

“We want to make sure they know exactly what the business is.” 

- Hector Alexis Romo, Managing Partner at Modern Woodmen of America

The internship should be considered as part of the interview process. Your staff can learn about candidates within the day-to-day activities of your organization. Your team should be coached on observing and assessing learning abilities, problem-solving skills, and their integration within the team. The interns not only gain career experience, but they also become very familiar with your culture and processes, so if there is a more permanent place for them, the transition will be smoother, and the long-term result will be more successful.

“We have a moral obligation to understand the next generation in order to save the industry, and protect the industry.”

- Bennett L. Sperber III, Managing Partner at Modern Woodmen of America

Farshad Asl’s approach, combined with the internship model, exemplifies a proactive educational strategy that ensures only those who are serious and well-informed about the role make it through the initial stages of recruitment. This reduces the likelihood of early attrition and fosters a more motivated and dedicated workforce.

2. Implement a Rigorous Selection Process

Once a pool of educated and informed candidates is established, the next critical step is implementing a rigorous selection process to identify those with the highest potential for success. For you and your team to choose prospects who are the right fit for your objectives, the recruiting process requires something more advanced than a standard set of interview questions.

Emotional Intelligence (EQ) is a key predictor of success in most careers, but especially so in financial advising, as it directly impacts an advisor's ability to build and maintain strong client relationships when dealing with investments and often volatile markets. Farshad Asl emphasizes this by integrating EQ assessments into his selection process. A high EQ can serve them when they will have to navigate the stresses and complexities of client interactions in an industry with much change.

His favorite interview question helps him dive into the EQ of a candidate:

What's the one thing you wish you could change in your current career?

“This question provides insight into the candidate's motivations, self-awareness, and potential for growth,” says Farshad. 

Not all of this strategy is necessarily reinventing the wheel. For instance, there are several interview questions we've all been asked in our careers that are still going to be useful, but only if you're prepared to ask follow-up questions and let there be silence. 

Example:

Interviewer:
"What’s the one thing you wish you could change in your current career?"

Candidate:
"Well, I suppose it would be to have a role that is more customer facing and less working behind a computer all day."

Interviewer:
"When you mention “customer facing”, why do you want to make this switch from your current role?"

Silence.
The interviewer waits for the candidate to gather their thoughts and respond.

This approach encourages the candidate to delve deeper into their initial, more high level response, potentially revealing more about their priorities, frustrations, and how they handle challenges. The silence after the follow-up question is a strategic pause, giving the candidate space to reflect and provide a more thoughtful answer.

At Modern Woodmen of America, the selection process is equally thorough, involving four interviews, two assessments, and a personal history background check. This multi-layered approach ensures that candidates are evaluated from multiple angles and that only those who demonstrate integrity, coachability, work ethic, and loyalty move forward.

Integrity is non-negotiable in a field that relies on trust, and candidates are assessed on their past behaviors and decisions to ensure they have the moral foundation necessary for advising clients on their financial futures. Coachability is also rigorously evaluated, as the ability to learn and adapt is crucial in an industry that constantly evolves. Romo and Sperber emphasize that coachability is often the hardest trait to assess initially, which is why they include a 60-day pre-contract period to further evaluate this quality in real-world scenarios.

During this period, candidates are put through their paces in a controlled environment where they receive training and feedback. How they respond to this guidance provides valuable insights into their potential for long-term success. According to Romo and Sperber, about one in five candidates do not demonstrate the necessary coachability during this period, underscoring the importance of this extended evaluation.

A candidate's prior achievements, references, and your interview process will give you a picture of Work Ethic. Questions will be designed to analyze determination and perseverance. Loyalty is harder to identify, but Modern Woodmen of America susses out long-term commitment in their career history and responses to interview questions. Job-hopping or those who can only give vague indications of future plans may indicate someone for whom professional loyalty may not be adequate for success in this industry and within your firm.

It is the collection of these elements that go into creating the multi-faceted selection process which will serve you in the long run by delivering candidates with the skills and knowledge required for the role while aligning with your values and long-term goals.

3. Building a Strong Brand to Attract Talent

An individualized, well-performing selection process up and running is the first step. Next, other people on your team will participate by building and maintaining a strong brand. Even if you already have one, chances are, it is not being managed with recruitment in mind, nor may it have the strategy of a 360 branding & trust program. 

The strength of your brand will be a decisive factor in attracting new talent. Hector Alexis Romo's advice is to focus on branding yourself as the premier destination for aspiring financial advisors. More than a beautiful website or a well-thought-out mission statement, your firm needs to make a concerted effort to be visible, respected, and trusted in communities you build online as well as your local one.

At every possible touchpoint—website, social media, and in your community—consistency is the key to building a foundation of trust and making a lasting impression on recruits. 

Partnering with a college is a very strategic method of accessing the newest talent coming up in the workforce without giving them the hard sell. Offer guest lectures to those with an interest in financial services, sponsor competitions, or provide an intern and mentorship program which promises more hands-on immersion than going on the coffee run. 

This is an important part of the 360-degree strategy for building and maintaining your position as a thought leader within the local academic community. Sharing those efforts on social media will help build your online community as well.

This leads us to your active online presence. Today, prospective candidates will more than likely know more about your firm than you know about them, thanks to the internet. Therefore, crafting your brand and image online is crucial to attract the best talent. This goes well beyond a pretty website; it includes an active and helpful social media strategy, not just a broadcast channel.

Most believe if you showcase your organization's successes and demonstrate thought leadership by consistently publishing whitepapers, articles, and blogs—such as the one you're currently reading—you’re all done. 

Go ahead and optimize your website with SEO best practices, regularly update your content to reflect industry trends, and actively engage with your audience on social media platforms like LinkedIn, X, and Facebook to position your firm as a thought leader. However, developing and maintaining your standing as a thought leader and a firm prospects want to work for and investors want as their advisor, you must include giving to the virtual community you will be building. 

Do not treat social media as a broadcast channel; treat it like you are holding a seminar, giving away information every day in the hopes it leads to future clients or employees—that's what you should be doing on X, Facebook, etc.

Local community engagement is also vital. Do not dismiss the opportunity locally and in your region; all too often, we believe the "community" in community building is limited to tweets and posts. Participating in local events will also serve to attract candidates for employment by developing your firm as a trusted and respected community member while enhancing your reputation among potential clients who want to be associated with your firm. 

How? Beyond joining and attending Chamber of Commerce functions, sponsoring charity events and local sports teams, consider hosting financial literacy workshops in local schools and community resource centers. These efforts will not only build your brand but also create a positive impact.

Employee Advocacy is another powerful tool. Encouraging your current advisors to share their positive experiences on platforms like LinkedIn or Glassdoor can provide potential recruits with authentic insights into what it’s like to work at your firm. 

What other 'social proof' could be as powerful as that coming from someone living the experience? Create an internal ambassador program to encourage employee advocacy. Recognize staff for sharing their work experiences online; make them feel comfortable interacting and representing your brand online. Offer incentives like bonuses or recognition for those who help attract top talent through their networks.

A 98% retention rate over six years is an enviable result, and that is what Romo and Sperber of Modern Woodmen of America have achieved by strong brand building & maintenance, and a rigorous recruitment & retention strategy. “Our goal with college recruiting is to get one good hire per school over 2-3 years—that’s a win,” says Romo. Quality over quantity is the name of the game; ensuring each candidate will be a strong fit and will likely succeed long term.

Romo adds, “We want to be able to go back to that college career center and show them that this student found success at our firm, and this is why we’re different.”

To ensure your branding efforts are effective, track key metrics such as online engagement rates, the quality of incoming candidates, and the number of referrals from existing employees.

4. Quality Over Quantity

By focusing on sourcing candidates from the channels you find most promising and then putting them through rigorous screening, you will ensure a higher likelihood of success; this process is called High Percentage Recruiting.

Just like the marketing team, recruitment needs to develop candidate personas based on the profiles of your most successful advisors. Consider factors like education, previous experience, personality traits, and career goals. This will help you tailor your sourcing and selection processes to attract candidates who are more likely to thrive. 

Step one in High Percentage Recruiting is Targeted Sourcing, which focuses on sourcing candidates from a few channels that have resulted in successful hires rather than casting a wide net and relying on posting on giant job boards.

This might include professional networks, referrals from current high-performing advisors, and partnerships with educational institutions. By focusing on these high-yield channels, firms can increase the quality of their candidate pool from the outset.

Romo and Sperber tend to focus on former athletes, who they’ve found perform best in competitive sales environments while also handling rejection well. As former athletes themselves, they understand the persona, or profile of athlete they want. 

Romo emphasized, “We’re not just looking at the All American. I want the person who earned their spot sophomore year, became a star junior year, and became a captain senior year.” 

An athlete's trajectory can provide insights into their EQ.

Once candidates are sourced, Thorough Screening becomes critical. Part of this process needs to be behavioral assessments and situational judgment tests. They are a level above traditional resume reviews and interviews by giving you insight into how candidates are likely to perform in the real-world environment of your firm.

A key component of Modern Woodmen of America’s approach is the 60-day pre-contract period, which serves as an Extended Evaluation Period. During this period, your candidates can be observed working in your organization. Coachability, work ethic, and the overall fit within your team should be the qualities your staff are looking at and will be crucial in determining whether or not to extend a formal offer while ensuring the candidate is aware of what to expect in their new role.

Lastly, a strong Referral System will enhance the overall effectiveness of High Percentage Recruiting. As Farshad Asl notes, "Successful advisors are often surrounded by other high-achievers. By tapping into their networks, you can find candidates who are more likely to thrive in your organization." Incentives like referral bonuses, added marketing budget, and "soft" rewards like recognition in company meetings are a few ideas as rewards for your referral program. Make it easy for your staff to submit prospects for consideration by providing an easy-to-use system.

The referral system is very successful because the employee is not going to submit someone who will embarrass them; the staff becomes one of your filters.

This referral principle is similar to the referral strategy Eszylfie Taylor teaches advisors, and the strategy that has helped him improve his market and create a steady stream of clients with the ideal persona. 

5. Fostering Success After Hiring

1. 1. Comprehensive Training: Getting the best-qualified and vetted candidate in the door and at their desk is just the beginning of cultivating a high-performing and loyal team. Your approach should be to continually offer and require ways to improve themselves in their career and within your firm. 

      Don’t strand them in their cubicle until review time; ongoing training and support are essential to nurturing your team. Start by creating a tailored training program that focuses on the specific needs of your advisors, and schedule a workshop today to get your team on the same page.

      What does a training program consist of? Yours may differ slightly, but, generally speaking, a good program consists of the following:

      (i). Sales Language and Process: Develop a structured training program that focuses on effective sales techniques specific to financial services. This should include role-playing exercises, objection handling, and consultative selling techniques. [we specialize in this]

      (ii). Product Knowledge: Include a 101 module on your firm's products and services as part of your internal training program (mentioned below). After passing entry-level, provide ongoing training on the broader financial markets based on their experience and knowledge.

      (iii). Compliance and Ethics: Along with your products and services, you need to have the infrastructure prepared to certify and train new hires in regulatory and ethical standards before being considered a "regular" advisor.

      (iv). Technology Training: Introduction and familiarization with the firm's software and technological tools should be an easy module to put together and pass. Ensure your new hire has the tools and is familiar with their use in your environment.

      (v). Soft Skills Development: Allowing your team to obtain additional certifications in topics such as effective communication, relationship building, and time management can play a significant role in ensuring the long-term success of your advisors.

   2. Mentorship Program. Farshad Asl emphasizes the importance of a robust mentorship system: "...this approach ensures that new hires receive the guidance and support they need to thrive."

      Key elements of fostering success include:

      (i). Pair new hires with experienced advisors who can provide guidance, share best practices, and offer support (“Joint Work”). Implement a mentorship program now by identifying top-performing advisors who can serve as mentors and scheduling regular check-ins to ensure the program’s success.

      (ii). Clear Career Progression: Design a clear path within your organization for all employees so there is no mystery as to how to rise within the company. Making this and other issues like pay as transparent as possible is essential for a healthy and productive team.

      (iii). Regular Performance Reviews: Check-ins should be consistently regular as well as performance reviews which should never be a surprise to staff or supervisors because of the nurturing, coaching, and open communication.

      (iv). Recognition and Rewards: If you are looking for a culture striving for excellence, a reward program noticing and applauding great work and top performers is essential.

      (v). Continuous Learning: Ongoing education with certificates, team acknowledgment, and various types of awards will create a team dynamic of growth and investment in your firm's collective success. Consider offering incentives for continuing education, such as covering certification costs or offering bonuses for completed courses, and set up a meeting with your HR department to discuss implementation.

6. Let Sales Psychology Inform Your Approach

In the competitive field of financial advisor recruitment, understanding and applying sales psychology and emotional techniques can give firms a significant advantage. Here are some strategies to consider:

1. 1. Storytelling:

      Use compelling narratives of successful advisors within your firm to create an emotional connection with potential recruits.

   2. Social Proof:

      Build credibility & trust by showing satisfied advisors in video and stills offering their testimonials. A fun way is to have your advisors request the testimonial from their client(s) via webcam in a very casual, authentic manner.

   3. Scarcity Principle:

      Think of how you feel when you think something is not going to be available for long. For a good prospect, they need to feel that way about getting a chance at a career at your firm. If the interviewer doesn't believe that in their heart, get one that does, because it's the truth, right?

   4. Reciprocity:

      Offer value upfront through educational resources or networking opportunities to create a sense of obligation in potential recruits.

   5. Loss Aversion:

      Highlight the potential missed opportunities of not joining your firm to motivate action.

   6. Personalization:

      Tailor the approach to your candidates based on their personal objectives, drives, and career goals, making a career with your firm a no-brainer.

Incorporating these psychological principles into your recruitment strategy can create a more compelling and effective process for attracting top talent.

Conclusion

As you embark on this journey, remember that the benefits will extend far beyond making good staffing decisions. You will also be strengthening your entire organization's performance, loyalty, and elevating your brand as well.

The most important, but difficult characteristic to determine of a new hire is their emotional intelligence (EQ). But we’ve seen that you can utilize specific questions, deeper dives into their experience, and a pre-contract period to see it in action. 

Education, however, is a critical component to qualifying candidates from the onset. Why waste time on interviewing candidates before they know exactly what this business is? Some managers prefer to educate advisors during the first interview, but you tend to “sell them” on the position. We’ve been doing this for a while, and we can sell the dream, but it needs to be their dream, and that’s why proper education is critical, and similar to how we sell solutions to our clients. 

When advisors “product sell,” they get objections, and may lose out on a few thousand dollars of commission. When you don’t properly qualify a candidate, it can cost upwards of $60,000 per year to recruit, hire, and train a new advisor. Evaluate how you are educating your prospective candidates and find areas in your process to increase the conversion rate and save time.

Spend time assessing your brand. If someone is learning about the business, they’re probably learning about your company for the first time also. What will they find if they google “[Your Company Name]”?

If you google “Eszylfie Taylor Taylor Method” you’ll find articles, interviews, and videos all over the internet. If you google specific search terms like “Prospecting strategies for financial advisors” you’ll see that Taylor Method (as of Sep 2024) is #1 in Google search results. Plus over 138,000 followers on Eszylfie’s personal Instagram account.

This is a strong brand. A staple in Pasadena, California, a web presence, and a social media presence. 

Don’t wait—start transforming your approach today. Schedule a strategy session with your team, set clear goals, and take the first steps toward a more effective recruitment process that will secure your firm’s future success.