Talent acquisition has become the linchpin of success for RIA firms. Cerulli Associates projects that over 100,000 financial advisors will retire in the next decade. According to the Bureau of Labor Statistics, this represents almost one-third of the workforce. Given this outlook, finding and nurturing next-generation successors is not just important – it’s critical for survival and growth.
The Talent Imperative
RIAs must position themselves as destination firms for emerging talent. This involves more than just filling shoes – it’s about attracting professionals who can maintain the current business while driving innovation and growth. As the industry faces this seismic shift, firms that successfully attract and retain top talent will have a significant competitive advantage.
Three Strategies For Securing Next Gen Talent
Cultivate Internal Talent
Identifying potential successors within your firm is an excellent starting point. However, it’s crucial to look beyond replication of current leadership. Seek out individuals who can bring fresh perspectives and drive growth.
Your ideal successor should be capable of maintaining and improving upon the existing business model. They should have the vision and skills to enhance or revitalize company culture, which is often a key differentiator in the industry.
Look for candidates who have the skillset and presence to impress your existing client base and attract new clients, additional assets and referrals from current clients. Additionally, consider how potential successors might position the firm as an attractive future acquisition target, should that align with your long-term strategy.
Remember, culture plays a pivotal role in your firm’s success. Your chosen successor should either preserve a strong existing culture or be capable of leading positive cultural change. This ability to navigate and shape organizational culture can be a significant factor in the firm’s future success.
Buy Your Successor
Broadening your search beyond your firm’s walls can uncover exceptional talent. One effective method is conference scouting. Pay close attention to young, engaging speakers at industry events. Look for recurring names and individuals whose perspectives align with your firm’s vision. These rising stars often represent the future of the industry and could be excellent additions to your team.
One effective method is conference scouting.
Networking is another powerful tool in your talent search arsenal. Leverage your professional networks to uncover hidden talent. This approach can help you find promising candidates before they become widely known in the industry. Often, the best talent is found through personal connections and recommendations.
For firms with the financial means, strategic acquisitions can be a way to bring in new leadership talent. Acquiring smaller practices not only expands your business but can also introduce you to potential successors. However, it’s crucial to ensure that talent assessment is balanced with other key metrics in your acquisition strategy. The right acquisition can bring both business growth and future leadership to your firm.
Search For Next Gen Talent
Advisors can also engage specialized search firms to find your company’s next leader. For firms that elect to go this route, it’s imperative to utilize a search firm that is familiar and experienced in financial advisor searches and has deep knowledge of the wealth management industry.
By using a firm to search for your Next Gen leader, advisors benefit from the search firm’s access to hard-to-find talent and hidden candidate pools. Depending on the search firm, another benefit could be its national reach as a sunsetting advisor’s ideal Next Gen leader may be across the country.
The Process Takes Time
It’s best to give this process time rather than trying to jam a square peg in a round hole.
For RIAs looking to transition leadership within the next decade, the time to act is now. Finding the right successor is a process that requires time, thoughtful consideration and strategic planning. It’s best to give this process time rather than trying to jam a square peg in a round hole because of time constraints.
Steven Clark is President of DAK Associates and Senior Advisor at Gladstone Associates.
