More Needs, More Demand for Wealth Managers
WARREN, Ohio – In the 25 years Stephen VanSuch has worked in wealth management, he says he’s never seen a time when the need for financial advice is greater – and he’s never seen a greater need for a fresh workforce.
VanSuch is the senior vice president and resident director, wealth management adviser with Merrill Lynch/The VanSuch-Chahine Group in Canfield. He says lives have gotten more complex. While “the greatest generation” had one car, lived their lives in one house and worked in a job that provided a pension upon retirement, that is not the case today.
People have more financial obligations – therefore more financial concerns, such as college tuition for their offspring, mortgages, their own student loans, carrying enough insurance, etc. And while consumers have more information at their fingertips, that doesn’t always educate them to make important life decisions, he says.
“There is an incredible need for advice. More so than I’ve ever seen,” VanSuch says. “It’s an incredible opportunity right now and we just have a tremendous need for hiring in the wealth management industry.”
Pair that with an aging workforce in wealth management – the average age of a financial adviser ranges in the mid to upper 50s and 60s, even into the mid to upper 70s in the larger firms – and it would appear long-standing firms are ripe for an influx of young talent.
Not necessarily so, managers say.
Typically, wealth management firms are engaged in a “trust-based, long-term relational business.” So they aren’t rotating employees like a more commodity-driven business, says Jonathan Lapine, principal at W3 Wealth Management. When W3 hires, it’s usually because the firm is expanding through mergers and increasing its client base, he says. That creates challenges for recent graduates looking to get into the industry.
“I wish I could hire another two dozen of the very talented people that are coming out of Youngstown State University. And we’re involved in helping those students,” Lapine says. “I wish I could create a bench like that – because I know that many of them will turn out to be phenomenal. But the nature of our business doesn’t always support that.”
Over the last few years, Lapine has made the transition into a leadership role with W3 in preparation for the retirement of Andrew Moyer, who worked his last day at the firm on June 30. In the years leading up to Moyer’s retirement, the firm had been hiring new talent as part of its succession plan.
Financial advisers Ryan Glinn and Jean Daley added to the younger lineup at W3’s Warren office. The firm has an intern from Youngstown State University. W3 is actively involved in mentoring and internship programs to guide the next generation of advisers, Lapine says.
According to data from the U.S. Bureau of Labor Statistics, employment for personal finance advisers is expected to increase 7% from now until 2028, which is faster than the average for all occupations. As Americans live longer, they will need to plan for longer retirement periods, the agency explains. Additionally, because most companies no longer offer traditional pension plans, individuals are responsible for their own savings and investments for retirement.
“People like to have a partner in making those very wise decisions that they’re going to make,” says Merrill Lynch’s VanSuch. “I don’t see that subsiding any time soon.”
To guide that next generation, professionals like VanSuch have worked with YSU to develop future advisers. Having local resources is a benefit to YSU’s Williamson College of Business Administration, says Jeremy Schwartz, interim director of the Lariccia School of Accounting & Finance.
“We have plenty of interest from the students’ standpoint,” Schwartz says. “Which is wonderful because we don’t have a lot of full-time finance faculty. But we do have a lot of people in the community who are willing to offer their services by teaching classes, particularly in the certified financial planning areas.”
The CFP track at YSU is still relatively young. But demand for it among students is increasing, Schwartz says. In the 2018-19 school year, the university graduated 18 from the CFP track, up from six in the 2016-17 school year.
Schwartz accounts for the shift in interest to CFP to the relative newness of the program and that it requires a year less in school to complete. Becoming a certified public accountant, or CPA, requires 150 semester hours, “so there’s an added year of coursework to undertake to get that certification,” he explains.
As CPA firms look to offer more advisory services and advice, that could open some job opportunities for CFP graduates, he adds.
Area firms as well as larger companies such as Merrill Lynch and PNC offer internships for YSU students, says Christina O’Connell, director of the Center for Career Management at Williamson College. They’re particularly interested in the CFP students who, as interns, work with advisers on developing financial plans.
“By doing that background research, even in their early internship responsibilities, even if they’re not in direct contact with clients, they’re building that toolbox,” Schwartz says. “They’re seeing how the market works and understanding how the market can help those clients.”
Experience gained through internships and mentorship programs gives students an edge in trying to break into the wealth management industry, which presents “high barriers to entry,” says W3’s Glinn.
“When you’re coming out of college, your experience level simply isn’t there,” Glinn says. “So getting started can be challenging to earn the trust, particularly of older established individuals who are preparing for retirement.”
Seeking the guidance of more established advisers can help new advisers find success more quickly, he says. To those young professionals, Glinn advises, “Focus on being a sponge” and learning as much as possible from the veterans.
Whether he’s working with new hires or talking with younger advisers through a mentorship program, Glinn encourages them to sit in on as many meetings with clients as possible. Repetition exposes advisers to more scenarios and experiences to build their confidence, he says.
To help prepare its advisers – new hires and seasoned veterans alike – W3 implements the “firing squad,” a client simulation of Glinn’s design.
One adviser sits in the hot seat while W3’s seasoned advisers ask some of the toughest questions that they’ve been asked in their careers, Lapine says.
Firing squads are held monthly.
“We’re blessed with all of that experience. And in order to speed that curve up a little bit, we simulate that on a regular basis,” he says. “We act angry. We act skeptical. We drill down to the details. But every question we ask is absolutely a question we’ve been asked before.”
W3 also employs a two-adviser model for each client meeting because it brings “a diversity of perspectives and more brain power toward solving their financial questions,” Lapine says. It also works well with getting new hires familiar with the meetings and the clients.
And W3 encourages all advisers to strive toward earning credentials, particularly the Certified Financial Planner diploma.
“Every adviser that joins our team is expected to further their development and earn that credential and others,” Lapine says.
In addition to internships, YSU works with area firms to conduct its annual Practitioner Days and the Professional Development Summit, during which students meet with employer panels to ask them questions and to network, YSU’s O’Connell says.
Many of the wealth management firms YSU works with end up hiring interns to full-time roles, including some in the Mahoning Valley, she says.
Some firms start new hires on a two-year base salary, during which time they can earn more licensures and increase their client bases, “so at the end of those two years, you will be sustainable through commission,” she says.
That experience benefits graduates who might enjoy more success by starting their own practices rather than positions with established firms, VanSuch notes. While opportunities do exist, “Those just don’t come around that often,” he says.
New advisers have the advantage of using technology to research, network and connect with new clients, VanSuch continues. Building a practice one client at a time takes effort, he says, and an understanding that the clock-in, clock-out mentality does not exist.
Building a well-established practice takes about 10 years, he adds. “You have to put in a tremendous amount of time,” he says. “You have to have an entrepreneurial mindset. The job is 24/7.”
It’s likely that rookie advisers will find an established firm to support them in some way, “but you have to be coachable,” he says.
VanSuch advises graduates who strike out on their own to pay attention to those who have worked in the industry for years and learn from their successes and mistakes.
“We’ve been there. We’ve done that. We’ve made a lot of mistakes along the way. You don’t have to reinvent the wheel,” VanSuch says. “There’s so much to comprehend; so you have to continuously be a student of the game.”
Copyright 2021 The Business Journal, Youngstown, Ohio.