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Hosted by Financial Advisor Coach, Ray Sclafani, "Building The Billion Dollar Business" is the ultimate podcast for financial advisors seeking to elevate their practice. Each episode features deep dives into actionable advice and exclusive interviews with top professionals in the financial services industry. Tune in to unlock your potential and build a successful, enduring financial advisory practice.
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Welcome to Building the Billion Dollar Business, the podcast where we dive deep into the strategies, insights, and stories behind the world's most successful financial advisors and introduce content and actionable ideas to fuel your growth. Together, we'll unlock the methods, tactics, and mindset shifts that set the top 1 % apart from the rest. I'm Ray Sclafani, and I'll be your host. How do you overcome the great talent squeeze?
and win the war for advisor talent. We all know the advisory industry is on the brink of a perfect storm. Within the next decade, we will face a projected shortfall of roughly a hundred thousand advisors due to retirements. And that's going to lead to a talent shortage that we've never seen before and create a time consuming and extremely costly scramble for top advisor talent. Here's the real challenge. Money alone will not solve this problem.
You can't simply overcompensate to make up for this shortcoming. Today's top advisors, especially next generation talent, they're not just going to pursue maximum compensation. They have an advantage there. However, they're also going to seek firms and select landing spots based on other factors like culture, leadership, career trajectory, the types of clients your firm serves. You've got a simple choice. Reposition your firm to attract elite talent
or maintain the status quo and scrambled or survive as the talent squeeze worsens. If you don't start working to attract and develop top performers soon, your business will ultimately be left behind. As entrepreneurs, we've all made missteps and mistakes at some point in our journey. If you can't admit that, you're just fooling yourself. What separates the most successful entrepreneurs is a willingness to learn from the past, staying present,
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and focusing on the future, anticipating what may be lurking on the horizon. This is why maintaining a strong future focus is essential. Top performing advisors have options. They aren't just searching for a J-O-B, they're seeking a career destination where they can grow, they can make a difference, and collaborate with like-minded professionals. Therefore, you want to build a firm that is the employer of choice.
You'll need to develop a compelling reason for these high performing elite advisors to want to be a joiner to your firm that sets your firm apart as this appealing destination for top talent. Here are just five ways that you can effectively distinguish your firm to prospective advisors. The first, cultivate a high performance culture. Although culture is often referred to as the invisible advantage,
Research shows it has very visible consequences. Even more than inadequate compensation, just the perception of a toxic work culture can drive your most desirable new hire candidates to run for the exit. Remember that culture encompasses much more than mission statements and office perks. It involves how your organizational leadership interacts with their teams, how your firm develops talent, and how trust
is established, maintained, and consistently reinforced throughout the business. The data illustrating that diverse perspectives foster innovation and enable advisory firms to serve their increasingly diverse client base, it's overwhelming. Be assured that your ability to create an inclusive environment that welcomes individuals from varied backgrounds will be a significant consideration for top candidates.
By emphasizing diversity in recruitment practices and nurturing an inclusive culture, you can access a broader talent pool and cultivate a more vibrant and dynamic workforce for the future. Number two, enhance your digital capabilities. In an increasingly digital world, advisors, especially younger GenX and millennials, expect a strong tech stack to simplify client engagement, streamline operations, and provide actionable insights.
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Investing in advanced technology demonstrates to potential hires that you are a forward-thinking firm capable of meeting the evolving needs of and dedicated to supporting advisor productivity. 3. Get creative incentivizing recruitment. Competitive compensation package should be seen as table stakes rather than differentiators. Today's top advisory firms are taking it further.
exploring innovative incentive structures tailored to individual advisor preferences and performance metrics. From rev share arrangements to equity ownership opportunities, think through thoroughly evaluate your compensation model and explore creative ways to align advisor interests with organizational goals better that aligns with client outcomes and client goals. Number four, be realistic and proactive.
Ensure you fully understand the roles you're hiring for and what those positions are worth in today's marketplace. You want to hire the talent before you need it. You want to always be recruiting. Recognize that the talent pipeline and the time to acquire top talent is taking longer in today's marketplace. Rely on compensation benchmarking studies. In fact, we'll put the CFP board information in the show notes. You want to validate all of your assumptions.
If you're dedicated to attracting the very best talent, your firm's compensation philosophy must demonstrate a commitment to offering compensation that's above market rates. Additionally, if you want to attract top talent, don't wait until there's an urgent need before hiring. You don't want to settle. You want to hold out for the right candidate. Recruiting in advance of capacity concerns not only will boost your overall team morale,
but it will give the new hires a chance to integrate into the organization before diving into the deep end. Number five, recruit for tomorrow more than today. The goal is to identify and nurture future leaders, not just advisors who can meet current needs. Always remember that some of the best candidates may lack specific skills you want right now. These can be developed. These individuals possess
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may be broader abilities that will set them apart and make them invaluable later on. Much like client recruitment, elite advisor practices don't engage in on-again, off-again recruitment of advisor talent. Instead, they're constantly networking and seeking to connect with potential future leaders of the firm. Ensure that you communicate early with potential new hires about their expected career paths. In fact, this should be a major focus of your recruiting discussions.
It should be the main differentiator. will help you gauge their organizational fit and allow them to determine if they are willing to commit to what it takes to advance within your organization. You should also strive to match your communication and outreach with the preferences of next generation advisors. Traditional recruiting methods, they don't work as well as they used to. Younger professionals aren't typically scanners of information rather than readers.
As such, they tend to prefer a steady stream of digestible nuggets. They're far more likely to turn to social media for information, often making them more willing to engage in informal conversations around personal likes, dislikes, and preferences. In fact, I follow in Reddit the CFP sub stack, and it's really interesting to see the number of young individuals and mature professionals
testing the market to see what compensation looks like, what roles and responsibilities look like. If you're a Reddit fan, check out that CFP sub subreddit. Before you begin, make sure you have all your ducks in a row and think about your formal advisor recruitment plan. Here are a few things I consider. Number one, have a clear understanding and vision of who you want your next hire to be. Number two, document
those roles and responsibilities for all positions in a detailed way. Everybody you intend to hire over the next year, two and three. Third, a compensation structure that is formalized and understood by all members of your firm and by the candidates you seek to hire. Number four, document professional development plans for all the employees in your firm and have that clear career path kind of laid out or the choices that individuals can make. Number five,
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Have a straightforward, concise, and organized recruiting process. Number six, have a commitment to dedicate the necessary time and energy to develop new hires. That'll keep you from the on again, off again I mentioned earlier. And lastly, document your onboarding and offboarding processes for all team members, advisors and CEOs and leaders who maintain a consistent focus.
on recruiting talent and allocating resources, whether internal or external, will continually attract and retain top talent. If you can clarify where your firm is headed and understand the individual's aspirations, you'll be well positioned to show how, when, and where both visions can align in the future. With each episode, we provide a few coaching questions to consider with your leadership team or just to reflect for yourself. Today, there are three questions. One.
What is the one thing your firm does exceptionally well today to attract top talent? And what's the one area where you still struggle? Number two, high performing professionals have more choices now than ever. What makes your firm stand out as an employer of choice? And number three, if you could change one thing about how our industry recruits and retains advisors, what would it be and why?
Well, thanks for tuning in. And that's a wrap. Until next time, this is Ray Sclafani. Keep building, growing and striving for greatness. Together, we'll redefine what's possible in the world of wealth management. Be sure to check back for our latest episode and article.
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