Recruiting Career Changers to Become Financial Advisors

A few years ago, when Chuck Goldman sold his highly-successful automotive plastics business based in Leominster, Mass., for tens of millions of dollars, Rob Cotter— producing manager of a Wells Fargo Advisors branch in nearby Worcester—wasted no time going after him. But it wasn’t Goldman’s account he wanted; he already had that.

“Chuck always had a tremendous interest in the investment industry,” Cotter explains, “and he’d scheduled an interview with UBS about becoming an advisor. I didn’t want to lose him. I knew his 20 years of business experience—having turned a relatively small family operation into a multi-million-dollar enterprise—was something our branch could benefit from exponentially.”

Cotter didn’t just recruit Goldman to join the branch—which currently has 26 advisors and over $2 billion in AUM; he ultimately made him part of his own FA team.

This is but one example of a growing industry trend—and an outright initiative at WFA—to seek new FA recruits among career-changers. Industry experts say that an advisor shortage may well be looming (an assertion Registered Rep. carefully scrutinized in its April cover story, The Myth of the Vanishing Advisor). The FA population is aging. Cerulli Associates reports the average financial advisor is currently just shy of 49-years-old, and says 14 percent of advisors are over age 60 and thinking about selling out. There also was a shake out of advisors following the market collapse of 2008. Then there is this fact: Fewer than 20 percent of new wirehouse trainees—who cost approximately $300,000 to fully train—successfully complete their training programs.

Roughly two years ago, in fact, WFA put a new recruiting strategy in place. Says WFA spokesperson Rachelle Rowe, “First, unlike some firms, we decided not to slow down our training programs after the market crisis and have been steadily hiring at least 800 new FAs each year.” And second, the firm has been seeking approximately 50 percent of new advisor recruits from outside of the brokerage industry. She says, “These are people with an average of 16 years work experience behind them.”

Since January 2010, 63 percent of WFA’s approximately 1,200 new trainee hires have come from outside the financial services industry, says Michael Zuccarello, the firm’s managing director of training and development. Eighteen percent were recruited from financial services sales or banking sales; 12 percent came from mortgage, real estate or insurance sales; and less than 10 percent were recent college graduates or administrative professionals, he says.

(While spokespeople from and Morgan Stanley Smith Barney and BoFA Merrill Lynch said their firms have found new recruits from other industries, neither would confirm a direct initiative to do so, or provide any numbers. UBS did not comment)
WFA FA Cotter called recruiting his client Goldman a “no-brainer:” He was already a respected business leader in our community. He’s a confident and talented salesman, which is how he grew his plastics business. He’s accustomed to success and has a wealthy circle of neighbors and friends to network with. And, he was motivated to make money, because he had a certain lifestyle that he wanted to sustain.”

Cotter also acknowledges to having a luxury, in this case, that most recruiting BoMs do not: “Chuck was my client for five years, so I really knew his business acumen, investment knowledge, and his integrity.”

The forty-something Goldman joined WFA in July of 2008, quickly rose to the top of his training class, and began producing in January of 2009. In just under 2.5 years, Goldman says his AUM went “from zero to $80 million.” Roughly 60 percent of his clients are people he had not previously known.

Though he experienced some “normal anxiety” about changing careers, he believed he would ultimately succeed. “When I ran my own business, I was very involved in the finances. I have a degree in finance, and I managed our internal 401(k) plan.” He’d also always been involved on the sales end, and says he never let rejection faze him, something he considers “critical to success in the securities industry.”

“I’m always interested in successful professionals looking to change careers who I think have the tenacity to be successful FA’s,” Cotter says. WFA has internal programs designed to locate suitable career changers, he says, and he also asks his existing reps for referrals.

Roger Aiken manages a 16-branch WFA complex based in Asheville, NC, with combined annual production of over $30 million. Of the 80 reps he oversees, 15 are trainees, nearly all of whom are career-changers. One had been a pro-golfer, another a school teacher, and another was assistant general manager of a minor league baseball team.

Aiken says his 24-year branch management career—which began at JC Bradford—taught him the key to successful recruiting was “hiring people for their character and relationship-building abilities, and then ‘training’ them for everything else. Had I limited myself to people with financial or sales backgrounds, I’d have missed out on some amazing advisors.”

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