People have a hard time planning for the long term. One big example: Many clients dont plan enough for retirement. Companies are often no better in planning. Just like investors who know they should save more but dont, financial companies have known for years that they should be cultivating more young talent. But they havent.
Longtime recruiters in the advisory industry have been pointing toward a day of reckoning for years. Even while their own practices thrived on advisor mobility, they often would express dismay as firms decided that cherry-picking the competition was the easiest way to staff up.
That day has dawned, and it couldnt have come at a worse time. As boomers retire in droves, advisors, most of whom are boomers themselves, are entering their own golden years. After seeing this issue increase in importance, we decided to focus on it for our cover story this month. Contributor Carol Clouse says she feels the main takeaway from her research is that banks are in need of a better plan for advisors career trajectories, from internships to retirement (which would include succession planning, a new issue for bank management.)
This idea has been lurking just beneath the surface for a long time. While the other advisory channels offer various forms of succession planning, bank advisors would often just get an office party on their last day. Any real plan entailed them moving on 10 years before retirement, either to a wirehouse or forming an RIA, and then using that as a springboard into their retirement years.
Banks have long been enamored with the non-interest income an advisory program can provide. And theyve made the very reasonable argument that many consumers who cannot afford the wirehouses can still be a solid client base. But now theyre facing this new challenge that will directly impact how theyre viewed as a career choice.
A party just wont cut it anymore.