Sales & Marketing | 10.25.23

Banks Need To Put Rookie Advisors on a Faster Track

by: Rich Blake

The path for a junior bank advisor typically is spelled out in a straightforward fashion. Come for the guaranteed salary, stay for the continuing education and business leads that come from assisting a senior advisor. 

But hurdles do pop up on the road to seamless transition. Luckily, they are often glaringly obvious and can be tackled head on. 

According to BISA/Cerulli researchers, compensation continues to be a sticking point.

However, it also seems some young advisors feel that they aren't climbing the ladder fast enough.

A Little More Leeway?

Cerulli found that many junior advisors believe that they should be moving from the lower rung to more fully out on their own and more quickly than the bank is willing to allow. 

"This can lead to a young advisor seeking employment outside of the bank, often securing themselves a title advancement and a pay increase virtually overnight," Cerulli said. 

For many advisory program leaders, the win-win of bringing on a junior staffer and pairing this person with a seasoned veteran would seem like a no-brainer. The greenhorn can take smaller accounts and help prospect, allowing the senior advisor to focus more on actual financial planning while, ideally, mentoring their junior apprentice.

To prevent junior advisors from leaving after, say, three years (once their guarantee expires), a regional bank executive suggests the creation of a formalized training and mentorship program.

One young advisor told researchers about recently joining just such a new training program, one which helps licensed bankers build their own book of business alongside a senior advisor. 

There seemed to be a sense that such a program was overdue.

"Promoting internal people creates a better sense of culture,” the young advisor said.

Trust Has To Be Earned

Setting the bar correctly so it can be exceeded is a critical part of making the junior/senior pairing work most effectively. The junior advisor has to take responsibility for developing their skills so that the senior advisor can feel comfortable involving them in the process. Whether taking extra time to craft a thoughtful response to a set of thorny client questions or doing above-and-beyond social media posts as an added value, the young advisor can take proactive steps to be seen as worthy of a mentor’s time and energy, stoking a virtuous cycle.

The number one difficulty for senior advisors mentoring younger advisors is confronting younger advisors who expect career advancement too soon. 

Some 60% of survey respondents listed that as a major challenge. Next on the list of challenges is "too much time for day-to-day training."

Senior advisors often indicate that they see little value in mentoring rookie advisors, Cerulli said.

What's most frustrating is the notion of investing oneself in the training a young advisor — only to see them "graduate into competition with them internally or leave the firm for a more attractive opportunity," Cerulli said.

Senior advisors need to be careful and thoughtful when it comes to transitioning smaller clients to the junior staffer — optimally, conveying the sense that they are going to get even better service than they have come to expect; additionally, senior advisors need to express that they will still be involved, that account is not just being “handed off.”

Setting Up For Success

Dimple Shah, an executive at Osaic, a wealth management firm, told Investment News this past summer that the key driver of a successful apprenticeship model is making sure that senior advisors have "sufficient bandwidth to mentor and apprentice the junior advisor that has joined their practice." 

The junior and senior advisor will likely have a good sense of whether the junior advisor is on the right track fairly quickly based on their personal and professional chemistry, Shah said.

“The key to evaluating success is whether the senior and junior advisor have an agreed set of weekly or monthly activities that will, over time, lead to sales success and an accountability and evaluation construct to evaluate progress and course-correct where necessary,” Shah said. “If so, then the junior and senior advisors likely have a good sense of whether the junior advisor is on the right track within the first six to eight months.”

Setting expectations between young advisors, their seniors and bank management is a key factor in retaining junior advisors while simultaneously keeping senior advisors content in their roles, according to Cerulli.

This past May, Cerulli and BISA jointly published, "Improving Recruitment and Retention Throughout Advisors’ Lifecycles: Uncovering Opportunities and Best Practices Within Banks."

Through interviews with advisors at BISA-member firms, Cerulli identified several key areas that warrant emphasis when recruiting rookie advisors.

To find out more and obtain a copy of this report, click HERE.