In order to drive long-term growth for the business, organizations need to make those investments in talent, says Patrick O'Connell of Ameriprise.
What special measures is Ameriprise undertaking to attract talent?
The reality is that the industry is aging. Weve taken a number of very proactive steps. We were an organization for decades known as being a tremendous firm that would hire new advisors, train new advisors and help them get established in the business. In the last couple of years I have personally spent a significant amount of time and the firm has spent a lot of resources, especially in the major markets and major cities, establishing training programs to bring new advisors into this business, and help them get the support that they need and the training that they need. So, in order to drive long-term growth for the business, organizations need to make those investments in talent. In many cases with new advisors, it takes three to five years to establish themselves. But, again, if you identify long-term growth in your business, you have to be willing to make those investments.
Regarding experienced advisors making changes, every single year you have advisors that for any number of reasons look around for different value propositions and different approaches that might be able to support their business and their clients more effectively. Prior to six years ago, hiring experienced advisors wasnt a significant focus of our firm, but in the last five years it clearly has been. What we have realized is that how we operate the business, the culture that we have, the support that we provide has resonated in the marketplace. Each quarter, you have ebbs and flows, but weve had continued success bringing experienced advisors from other firms to Ameriprise.
Ameriprises increasing the dollar value of its recruitment package in June surely helped in that regard. Internally, was that regarded as a calculated risk, or another investment in the company?
Ill speak to our results over the last five years, having hired approximately 2,300 experienced advisors from a long list of firms. My experience hiring advisors from other firms tells me that the financials are important its somewhere in the top five but they also look at the platform of the firm they are considering joining, the products, the marketing support and the operational support they would receive, and the culture of the firm. We constantly look at that entire value proposition, and we also look at the financial offering that we have. As we look at the advisors that we attract, we will tweak and adjust as necessary. So in June we made the decision to change the financial offering not dramatically. It was a refinement; it was not a major overhaul.
How is the industrys client base changing?
Let me speak to the baby boomer generation first. We realized over the last five years the needs of the baby boomers were going to be a significant business opportunity, but their needs would be significantly different in how people thought about retirement, as things like benefit plans were left behind. So we created a strategy that you now see in our advertising, called a confident retirement approach. It is a strategy that addresses what creates stress in peoples lives as they reach retirement. Those issues are summarized very simply its helping them determine if they actually have enough money to last 25 or 30 years. Thats what creates the most stress for people. No. 2 would be helping them develop a strategy to produce income for a 25- to 30-year period of time. And then finally a strategy of protecting their wealth against all of the issues related to declining health.
If you can address those three issues for clients, stress levels go down and confidence goes up. We spent the better part of six years developing this strategy and are now using it end to end, whether in our advice tools, our product platforms, our marketing and our advertising, and our experience is that it really addresses what is causing stress and anxiety in peoples lives.
We think about Generation X, Generation Y and the millennials they are demanding a lot more and thats fine. Part of why they need advice, why they need guidance and coaching, is that if you think about the litany of disasters that people have gone through in the last 15 years with economic crises, market crises, terrorist events, wars theres been a lot of challenges that have created stress for the retail investors. Its why we spend so much time generating strategies for these generations to help them accumulate wealth and help them manage the difficult times that can occur.
Thats two different groups of people, and you need two completely different strategies and skill sets to serve those clients as they accumulate and those who are a few years from retirement or in retirement.
Does this split require Ameriprise to come up with new products?
The short answer would be yes. In some cases its Ameriprise introducing new products, and in many cases its our partners that we work with every day that have created new products. So we are constantly looking at new product offerings, new product strategies, to help our clients address the goals they are trying to achieve. My sense is that not only will it continue, but that the process will have to speed up.
What are your thoughts on the state of wealth management?
The future for advice is quite positive, whether it is the Baby Boomers, Gen X, Gen Y, the millennials -- those firms, and Ill include Ameriprise, that offer a comprehensive, holistic, ongoing advice model, there is tremendous opportunity to grow. Now that never means it will be every week, month or quarter, because things will evolve and change in the markets and in the economies, but clearly the need is going up, because peoples lives are becoming even more complex than they were even a few years ago, and people will need help sorting through that complexity to make good, informed decisions.
- Where is Edward Jones' James Weddle Looking for New Recruits?
- Digital Expectations Are Changing for Millennials, Says Morgan's Greg Fleming
- Wealth Management Profits Up 17% at UBS
- Wealth Management Income Jumps 22% at Wells Fargo
- BofA Wealth Management Profit Up 13%
- Profits Jump 17% at Morgan Stanley Wealth Management