Broker trainee programs, especially those at the big national firms, have notoriously had high wash-out rates. Typically, firms retain about 20 to 25 percent of their rookie advisors after three years, according to Andre Cappon, president and founding partner of the CBM Group, an international industry research and consulting firm.
Raymond James has been one outlier, retaining 83 percent of trainees in its Advisor Mastery Program in fiscal year 2016 across its employee and independent channels, up from 43 percent in fiscal year 2012, when the program was launched. Among employee advisors, retention was 86 percent in fiscal year 2016. The program takes standalone brokers as well as those part of a team.
“Eighty-six percent after two years is excellent,” Cappon said.
Every year, Raymond James is getting more rookies through the door by focusing less on sales skills—a turnoff for young people—and instead on relationship-building. It expanded the pool of candidates beyond those with industry experience, and is using distance learning, one-on-one coaching and mentorship to connect the training with real-world experiences in the field. It’s also a longer program than most, at two years.
That was a big factor that drew Jody Clark, a Tampa, Florida–based advisor and graduate of AMP, to the program. He was being courted by several of the big brokerage houses, but ultimately went with Raymond James.
“They had the longest training program, the most run-up time before you're actually considered a real financial advisor or left to your own devices,” said Clark, 34. “With the other brokerage firms it felt like, ‘OK, we're going to get you licensed and throw you to the wolves. You're going to have nine months to earn X amount of assets or you're out the door.’ Raymond James was more like, ‘We’re going to put some vested interest in you and time into you, and train you correctly.’ It seemed like the best family-type, humanistic fit versus a sales-robot type of thing.”
The program currently takes a maximum of 40 people per class, so at four classes a year, that’s about 150 to 160. That’s up from 75 a year when AMP Director Matt Ransom took over in 2014. He plans to double that number in the next couple years.
Trainees have four months to pass the Series 7 and 66. They then come to the home office in months 6, 11 and 18 for in-person training. But it’s not in lecture format; the classroom is much more interactive, where they are taught a skill, practice the skill, then teach back the skill, Ransom said.
“It's explaining a concept, and then you physically get up and go do that concept,” said Jamie Losito, an advisor based in The Villages, Florida, who went through the program in February 2014. “We called it speed-dating when we were there. And we got to try out all of the corny taglines; we got to work through all of the fumbles and did all the things we could possibly come up with in front of clients in a place where we couldn't lose money by fumbling over our words.”
Those concepts are reinforced once they leave the home office, with distance learning. They also record themselves in client meetings, post it on the class’s online community site, and receive feedback from their peers.
Each trainee is also assigned a coach, who contacts them once a month to make sure they’re performing the online activities.
“We’ve got this generation of really smart people, but they’ve been rewarded their whole life for knowing, not necessarily for doing,” Ransom said.
Each trainee also has a mentor, an existing, successful Raymond James advisor. That was especially helpful for Clark, a solo advisor.
“I get to see how he conducts a meeting,” he said. “I get to see how he invests his clients’ funds based on their goals. So you get that firsthand on-the-job experience right off the bat. Also, the mentors are very connected with the training program. In order to be a mentor, you've got to go through training yourself and understand what AMP is trying to do.
“You know, there’s not hand-holding, but you've got someone out there giving you that extra little guidance.”
New advisors don’t necessarily want to be salespeople, and while AMP teaches sales concepts, it’s a different version of sales, Ransom said.
“Nobody wants to be the cheesy salesperson that’s walking out, trying to sell you a mutual fund,” he said. “The right mindset to us means: There’s not always going to be a fit when you’re talking to somebody. They might not need help; that’s OK. If you have that mindset then you can ask the right questions to create clarity.
“We’ve spent a lot of time focusing on asking the right questions and not jumping to conclusions. It’s that last part—the jumping to conclusions—that makes people salesy.”
The program teaches advisors that by asking the right questions and actively listening, they gain a deeper understanding of their prospect’s gaps and increase client insight into their current situations.
Once the relationship has been fostered, advisor and client work together to fill in the gaps that were discovered and collaborate on a plan.
“It's just asking the right questions, and then what ends up happening generally is that it's really easy to see or for them to tell you a possible point of pain in their life, or a possible point of need or opportunity,” Clark said. “And if I'm able to solve that need or solve that problem or create a solution after they’re the ones who already presented the problem or own the problem or own the need, then it makes it that much easier.”
About two years ago, Raymond James started working on a project to find successful FAs it wanted to replicate through AMP.
“What we found is no correlation between industry experience and sales experience and success,” Ransom said. “In fact, a lot of our people had the opposite—they came in as blank canvases. They were just entrepreneurial and business owners and just curious people. So we started to change our mindset and expand our pool of who we’re looking for in the industry.”
Now about half of the new advisors in the training program have industry experience.
It could be that Raymond James’ training program is unique and does a better job retaining newbies. But CBM’s Cappon believes it’s more likely the case that trainees and prospects are attracted to the firm’s brand.
“Every firm will say their training program is special in some way,” Cappon said. “[Raymond James] still has that regional flavor, where they’re a big fish in a small pond, where there are relationships that are made at the country club and the church and so on, which create the brand of Raymond James. Their brokers, because they’re in those communities, are less incentivized or tempted to jump ship to a national firm because they’re used to that regional flavor, if you will.”