Firms address young-adviser angst

Financial planning firms are starting to address the concerns of young advisers who worry about their professional future.

“As firms grow and want to continue growing, they have to offer a career path to develop people in their own culture,” said Rebecca Pomering, chief executive of Moss Adams Wealth Advisors LLC of Seattle, which manages $850 million in assets.

“Firms will find that their investment dollars are better spent on creating better training programs because they can grow people in their own culture. We have to do it because there is too much competition for people in this industry,” Ms. Pomering said.

“The career path is the easy part, but getting people through the career path takes commitment from advisers.”

Concerns about career paths and advancement among younger financial advisers have been the topic of formal and informal discussions at recent conferences of the Denver-based Financial Planning Association and the Certified Financial Planner Board of Standards Inc. of Washington.

Most advisers who are entering the industry on their own don’t know what their next job will be, said Neil R. Dinndorf, associate financial consultant at SVA Wealth Management Inc. in Madison, Wis., which manages $900 million in assets.

“It is a challenge for the industry, and it is how we [evolve],” he said. “Putting a career path in place is needed to move this industry and profession to the next level.”

Six months after starting Fox Joss & Yankee LLC of Reston, Va., in 2006, planner Jon. P. Yankee decided that the only way to build a business model sustainable for the long haul was to set up a system for training and promoting new advisers.

At his previous firm, Rembert Pendleton & Fox in Falls Church, Va., advisers shared overhead and administrative costs, and built their own client base, but lacked a career path.

Fox Joss & Yankee, which now employs seven, wants to retain its staff for the long term. The firm developed a career path for new advisers, who start as associates for one to four years and then move up to financial advisers, senior advisers and eventually partners.

“We wanted to build a firm where people wouldn’t leave,” said Mr. Yankee, whose firm manages $250 million in assets. “We never wanted to build a company that would be sold to a bank; we want one that could have an internal succession plan.”

Over the next five to 10 years, Mr. Yankee hopes to expand the firm to between 16 and 20 employees.

LARGE-SCALE PATH

Baystate Financial Planning of Boston, a larger advisory firm, has created a career path for its employees which helped the firm expand rapidly over the past 12 years, growing from 44 employees to 300, including 200 advisers. When the 107-year-old firm was purchased by Dave Porter in 1996, the new owner asked advisers and insurance agents what they needed to improve their practice.

Today the firm attracts young advisers and career changers, and trains them according to their needs, which may involve fostering client relationships, planning skills or technical knowledge, said Herbert K. Daroff, an attorney and CFP at the firm, which manages $6 billion in assets.

Younger planners are paired with older, experienced advisers as apprentices. At the same time, the veterans learn about new techniques and technology from the newcomers, Mr. Daroff said.

“I feel that it’s imperative for those of us who have been in the industry for a while to start asking the right questions,” said Vincent Barbara, financial planning director at TGS Financial Advisors Inc. in Radnor, Pa., which manages $225 million in assets. “[An adviser new to the firm] needs to speak to the owners of a firm about exactly where you want to be.”

E-mail Aaron Siegel at [email protected].