Bringing in new talent is critical for the industrys success, but, as many advisors know, getting into the business isnt easy. Merrill Lynch, which will hire about 1,500 trainees this year, is trying to address that problem head-on, through its recent program, Team Financial Advisor. Racquel Oden, head of advisor strategy and development, discusses how the program is succeeding and how young advisors are faring today.
How are you rolling out the TFA program?
Its based on the demand of the team. About 50% of our trainees are in the TFA program, which means they have been hired to be on an existing advisors team. Weve moved from monthly hurdles to annual team hurdles, so it allows trainees to be part of something, be part of a team. It also really allows them to focus on client goals and priorities and to move away from buying and selling stocks and bonds, which is what traditional hurdles were built on.
What were the traditional hurdles?
They were based on volume of business you were doing. Here you are based in a team environment, youre getting the training wed normally give and youre getting to have interactions with clients.
Thats very important in our business, to get in front of clients. You get to do that much sooner because you are part of an existing practice with existing clients.
Will the TFA program grow over time?
Its truly based on advisors demand for that program. If our existing advisors are looking to expand their teams, then the answer is yes. But were comfortable with the idea that we do not have a number to hit. If they have the need and desire to expand their teams through this program, then they have the ability to do so through this program.
Where does the training take place?
The program lasts for 36 months. Its a combination of in person and virtual. They have virtual cohorts they operate in. They all receive a mentor as well as the support of the complex.
Whats amazing is that we have seen really strong graduation rates over the past few years.
Are success rates improving?
Yes. Its not just the TFA program. The overall success rate has increased. We have a very strong percentage that has stayed on target. The TFA is only about a year old, but they are on target. Retention is at extremely strong levels. We had over 450 graduates of our programs become advisors last year.
What are the factors behind that?
The training has always been strong, but weve made improvements through technology. We have virtual cohorts. We have mentoring, both in person and virtual. Thats important.
When you talk about the team environment, you have a senior advisor who is a daily coach and provides an opportunity to watch them interact with clients. Delivering goals-based wealth management has been a natural fit. Theyre seeing the success by the response with the clients because its the experience they want to have.
Are all new advisors joining Merrill through teams or are there still solo producers entering the field?
Its both. We have solo producers and those going onto teams. But over 70% of Merrills trainees are on teams. You need to bring in new advisors to help round out the offering.
Going forward, do you expect more changes in the way firms train young advisors?
Technology. We see that today in terms of social media, supporting our advisors through things like LinkedIn. The way people connect isnt always going to be in person.
But anchoring everything in goals-based wealth management isnt going to change. Being able to talk to clients about their goals and ensuring that their portfolio aligns with the goals is going to stay the core of what we do.
Are millennials interested in careers as advisors?
Yes. We created a specific FA internship program, focusing on universities. Its a paid internship with the idea that there could be a job offer when theyre done.
With the TFA program, its the first time weve had an ability to offer recent college graduates a clear entry into the business. Traditionally, trainees were second career individuals.