Why Financial Advisors are Leaving the Industry - And What We Can Do About It
By Matt LaBenz, Senior Account Manager, Emerging Enterprise Solutions
I first entered financial services in 2012 as a wide-eyed, enthusiastic new financial advisor. Immediately, I was excited by the idea of building relationships with clients and helping them improve their financial wellness.
I had dreams of building a successful practice of my own and creating the life I saw many of my fellow advisors live who had been in the industry for a dozen years or more.
Why Are Financial Advisors Quitting?
At first, it seemed like I had all the tools I needed to achieve my dream. I had a solid education, a strong work ethic built through my military experience, and the opportunity to work and learn from two of the top advisors at my firm.
But soon I learned that all of that wouldn’t be enough.
The Problem with First Year Financial Advisor Training
The team I joined had built a successful practice primarily by working with high net worth clients and business owners. And they were likewise inundated by a level of activities that kept their success high. Through no fault of their own, that allowed very little time for the kind of training regiment they wanted to deploy with me.
I knew my success was in my hands, and my hands alone, and I had to figure things out quickly.
This wasn’t a problem unique to me; the advisor workplace has a training problem. Too often, new advisors are left to fend for themselves.
The first thing I noticed was how I felt constantly intimidated by my clients. I was a 24-year-old trying to deliver financial advice to clients twice my age, with vastly higher amounts of life experience and business success than mine.
Prospects would constantly request a senior advisor to be present during meetings and many flat out refused to meet with me because of my junior status.
I felt inadequate, and thought that it must be due to my lack of knowledge in the field—but that couldn’t be right. The more I thought about it, the more I realized I knew more about the financial concepts and strategies I wanted to explain than my prospects did. They might have run a small business, but they had never created a financial plan or a real budget for themselves.
I checked all the boxes. I had all the licenses. I had the degree.
So what was it?
The Most Important Part of Being a Financial Advisor
Industry retention rates of advisors after their first four years hover around 15-16 percent. That means the vast majority of advisors quit the industry before they can even really get going with building a practice of their own.
Looking back at my own experience, I think I can pinpoint why I became one of those casualties. It’s because I never learned how to have that initial client conversation in a way that built trust and showed I knew what I was talking about.
I wasn’t taught how to position myself as a professional and develop a relationship that proved I was dedicated to the client’s goals and well-being.
In fact, I didn’t find the solution to that problem until I joined Asset-Map in 2018.
The Way to Build Confidence in Young Advisors
New advisors in the industry need easy ways to build confidence in themselves. One way to grow that confidence is to have tools that enable you to explain complex financial concepts in a way that makes sense to clients.
Asset-Map, and the way that it illustrates financial concepts, was the tool that I believe would have helped me surpass that four-year benchmark.
It is a guide that helps financial professionals apply their advisor intelligence directly to a client’s life, in real-time, and paves the way for effective conversations about the things that really matter.
If I’d had it in my practice ten years ago, I truly believe I would still have a practice. But that’s more than a gut feeling. Based on an analysis of our users, advisors who use Asset-Map are twice as likely to be employed by their firm after four years than those who don’t.
And that’s a number that doesn’t lie.
Looking to build confidence in your advisory team? Click here to schedule a demo of Asset-Map to see how easy it can be to become a more effective communicator.