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Recorded at the Market Counsel Summit. Presented by:
Advisorpedia interviewed FP Transitions CEO Brad Bueermann at the MarketCounsel Summit in December, 2021.
"All industry is run on talent, and financial advisory would be one of the most important to have the best and the brightest coming to work for clients, and supporting long term planning. It's something that requires someone with insight with analytic skills, and non law and a bit of wisdom in order to be able to make that work.
The problem is in for our industry is that talent in the past was all developed by large institutions, the wirehouses, most of the advisors of the of the generation that is now retiring, were trained by the wirehouses. But after the 1990s, the number of institutions that were actually training advisors declined precipitously. And so the number of advisors that are out there who are trained who have that has been diminished.
Well, the first thing that advisors have to do in order to attract talent is they have to be attractive. And to do that, they have to start with their own businesses. It really starts with their own business structure that is open and sustainable, that allows for a long term equity ownership in that firm.
In other words, there has to be a professional pathway for advisor for a junior advisor for them to be attracted in the first place.
Second, the compensation systems have to be aligned to be a professional compensation system. Unfortunately, the industry is riddled with eat what you kill type models. In other words, where the where the advisor fees are literally just split up between various advisors and junior advisors. You have to earn it by bringing in clients and then you get the spoils of those clients coming in. That doesn't work for somebody who is coming out of a school with graduate degrees and lots of student loans to pay.
The industry has to grow up in that regard. It has to have professional compensation systems, with bonus systems around it, that bonus around what real growth is for the firm, bringing in clients growth and assets and client satisfaction. Once that's done, the industry becomes much more attractive to the talent that is out there. Ready to enter this industry. We just have to be ready to go get it."
Resources: FP Transitions