Positioning for Growth: Benefits of Adding Next-Generation Junior Advisors to Your Team


Positioning for Growth: Benefits of Adding Next-Generation Junior Advisors to Your Team

A 2019 J.D. Power study shows the average age of financial advisors today is 55, with many advisors working well into their 60s and 70s. As an advisor ages, the client base often begins to resemble him or her. This means that you may have more clients nearing retirement rather than those that are accumulating assets, which impacts the ongoing growth of the business and its attractiveness for an eventual sale.

One way to address these issues is to hire and mentor one or more junior advisors. It will benefit you and your practice in many ways, while also helping to cultivate the next generation of financial advisors. Let’s look at some of the benefits for you:

A Connection to the Next Generation

According to the January 2020 T. Rowe Price Next Wave of Wealth Research Study, by 2030, it is expected that Generation X and Y households will control 47% of wealth in the United States, surpassing Baby Boomers at 45%. At the same time, these groups are set to inherit trillions of dollars in the next decade during the great wealth transfer. Financial advisor practices expected to thrive in the coming years will begin to have more younger investors as part of their client base.

Junior advisors from a different generation than your own may be able to more easily connect with these younger investors. They can also assist you with conversations with the children or grandchildren of your current clients and aid in the retention of these assets when your client dies and wealth transitions to these heirs.

A Plan for Succession

Clients want to know that you will be there for them when they most need you. The years prior to and immediately after retirement can be very challenging for clients. If you are the same age or older than your clients, they may have concerns about who will be there to assist them if you decide to retire or you begin to have health issues and can no longer work. A solid team, including a junior advisor or two, and a clear succession plan will help you assure your clients that there will always be someone they can count on, no matter what happens.

Junior advisors can also be potential successors for your business. If you bring them in early, you have an opportunity to train them to manage the business the way you run it and to help ensure your philosophy for doing business is carried on even after you retire. It’s a great way for your legacy to live on.

Technology Assistance

Hiring an advisor from a younger generation usually brings someone who better understands the latest advances in technology and how to navigate social media. Having this kind of resource in house can help you take your practice to the next level. Junior advisors can inject new life and enthusiasm into how you approach managing your pipeline, client communications, and the overall processes and efficiency of running your business.

More Freedom and Growth

One of the greatest benefits of adding a junior advisor is the freedom it brings. While you will need to invest some time to train them on your processes and philosophy, once they are ready, you can ask them to manage smaller accounts, while also getting them to assist with certain client service activities with larger, more complex clients. This provides you with more time to focus on bringing in new business and ongoing relationship building with your larger accounts.

Junior advisors can also help with prospecting ideas and bring new life to your marketing and communication plans for both prospects and current clients. Also, as mentioned above, they can often help you make a stronger connection with younger prospective clients, as well as the children and grandchildren of current clients, leading to greater growth and retention of assets. Finally, junior advisors are often enthusiastic about beginning to build their own book which can contribute to the overall growth and vitality of the business.

How to Get Started

As you consider adding a junior advisor or more than one, you should consider what type of candidate may be a good fit. While it may be helpful to find a candidate with some experience, you may want someone fairly new in the business or even just out of college so you can help shape their process for working with clients to fit your own philosophy. Someone with more experience may be more difficult to integrate into your practice. But overall, the level of experience will be dictated by what you ultimately need for your business.

You can post the position on the usual job sites, including LinkedIn, but can also talk to people in your network for potential candidates. Local colleges may also offer a pool of potential candidates eager for a new opportunity.

Overall, your primary focus should be on finding candidates whose values fit with yours and who will be dedicated to your vision for where you want to take your practice. Also, as you look to the future and adding younger investors, you may want to consider the diversity of your overall team, so they begin to match the overall demographics of those prospects you hope to attract.

Invest in the future of your business today. Start planning for the addition of a junior advisor or two to position yourself for growth and the eventual transition of your business.

For more information about Momentum Independent Network, contact Brian Neil at Brian.Neil@hilltopsecurities.com or 214-953-4190.

The paper/commentary was prepared by Momentum Independent Network (MIN). It is intended for informational purposes only and does not constitute legal or investment advice. The statements within constitute the views of MIN as of the date of the document and may differ from the views of other divisions/departments of affiliate Hilltop Securities Inc. In addition, the views are subject to change without notice.

Momentum Independent Network Inc. is a registered broker-dealer and registered investment adviser that does not provide tax or legal advice. MIN and HilltopSecurities are wholly owned subsidiaries of Hilltop Holdings, Inc. (NYSE: HTH) located at 717 N. Harwood St., Suite 3400, Dallas, TX 75201 (214) 859-1800, 833-4HILLTOP. Member FINRA/SIPC

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