Don't let your rookie advisors washout. They could be hall of famers someday.

Almost half the financial advisors in the market are over the age of 55, and within a decade of their own retirement. It’s a simple demographic fact that seemingly bodes well for young talent seeking to enter the wealth management business. Less advisors above them means more room for career growth, right?

Not necessarily.

A lot of promising young wealth managers get washed out of the industry early in their careers and it’s not always due to a poor hiring match. In a large number of cases its due to an overwhelming pressure to bring in new assets. A pressure that can be avoided if managed correctly from the onset.

Many firms squeeze young talent to develop contact lists, forcing them to make cold calls (smile-and-dial) and set appointments to generate business during the early months and years of their careers. This can often encompass high rates of rejection and lead to job dissatisfaction and burnout among young advisors. 

Matt Pearson, president of Nepsis, says his firm attracts and retains young talent by focusing on their education and developing strong processes, rather than prioritizing the acquisition of new assets.

“We believe that by concentrating on how the business works and by working alongside experienced advisors, new entrants to the industry can set themselves up for future success,” said Pearson.

Added Pearson: “Emphasizing the process and the fundamentals of investing, rather than new business. This approach helps to form the bedrock for a successful career and allows young advisors to mature and grow into well-rounded and seasoned professionals.”

Dimple Shah, head of corporate strategy at Osaic, says she expects about 10 trillion of assets managed by advisors to switch hands over the next couple of years. As a result, she believes that bringing on a junior advisor, or being a junior advisor in a team, allows for much more natural succession planning.

“It allows that junior advisor to be mentored and apprenticed by a seasoned advisor,” said Shah.

It also allows them to come in and immediately have a book of business to gain their sea legs, perhaps tending to the lower-end or smaller clients of the seasoned advisors. Furthermore, it’s a much more organic succession plan for the lead advisor and their clients because they've had the opportunity to get to know this junior advisor over an extended period of time.

“I think washout is one of the biggest challenges we face in the wealth management industry in how to cultivate and develop that next generation of advisors,” said Shah.

Chuck Failla, CEO of Sovereign Financial Group, says “mentoring” is key to preventing washout. By connecting the older, more seasoned, advisors with the up-and-coming talent, it’s a win for both sides in his view.

“The young folks are going to get the experience that's hard to get just from a textbook. But then also the older advisors like myself had the chance to start grooming our own successors,” said Failla, adding that “if you don't have someone to give that business to then that business is not going to sustain past that generation.” 

Meanwhile, Abby Salameh, chief growth officer at RFG Advisory, looks to partner with younger, growth-minded advisors that want a fully supported model.

“Our advisors are in their 40s instead of their 50s. We lean in heavily on helping them with their own organic growth efforts, assisting with everything from planning growth plans and then executing them,” said Salameh.

For example, they help advisors ideate their plans for driving new clients through social, digital, in-person events, webinars, and podcasts, and then create and execute the programs for them.

“This alleviates some of the pressure younger advisors may be feeling when it comes to bringing in new assets,” said Salameh. “Our advisors are independent, but never alone.”

The results have been high retention, over 19% organic growth, and an NPS score of over 85, according to Salameh, who also touts a program called RFG Talent which sources, hires and trains Certified Sales Associates for advisors, removing the burden of having to do this themselves.

Finally, Jon Foster, CEO at Angeles Wealth Management, says his model for retaining new advisors all the way through their becoming equity partners is simple: “All carrot, no stick.”

“Having sales targets that if you don’t hit you lose your job is actually destructive to success,” said Foster. “Nobody does well running scared. Hire great people, train them, inspire them, and give them enough runway to take off.”