Financial-services firms in Orange County are hiring more financial advisers in response to an improving economic climate, an uptick in retail clientele and favorable demographic trends.
“We’ve seen good, consistent growth in our practices here in Orange County, specifically in the average assets our advisers are managing and the number of new relationships,” said Jennifer Williams, Newport Beach Complex director at Merrill Lynch Wealth Management.
There are currently 43 individuals enrolled in Merrill Lynch’s recently revamped training program for financial advisers in OC. The firm’s goal is to hire about 2,500 new financial advisers nationwide this year.
A training program for advisers has been a staple at Merrill Lynch since the mid-1940s, and almost 80% of its revenue comes from advisers trained in-house.
“It has been an important part of the fabric of what we do for a very long time,” Williams said.
Merrill has instituted two major changes to its advisory training program over the past 18 months: assigning a market executive to every U.S. market to deliver a more effective program and incorporating a more formal, phased approach to training.
“We’ve been more thoughtful of the structure,” said Williams, who also noted a renewed focus on accountability at the local level.
Merrill has also formally incorporated the certified financial planner curriculum into its training program, which “helps to raise standards,” Williams said.
The firm assigns senior advisers to work as “real-time coaches” with new advisers, she added.
Merrill spends about $100,000 per year on each trainee in its 43-month program.
“This gives us a tremendous amount of time to invest in them, and we’re constantly looking for ways to fine-tune and enhance what we’re offering,” Williams said.
OC recruits are being trained to work in Merrill Lynch locations, rather than at Bank of America branches. The firm has nine OC offices.
Merrill Lynch had 259 registered representatives in Orange County as of Septem-ber, a 3% increase from a year earlier, according to this week’s Business Journal list.
Demographic shifts were a big impetus for Merrill to ramp up its hiring, Williams said.
“The first demographic shift is the aging baby boomer entering retirement,” she said. “This results in a great need for financial advice.”
Also, the number of affluent households in the country is growing and “will continue to grow at a pretty aggressive rate,” Williams said.
Meanwhile, the questions that investors are asking today are different from those prior to the market crash of 2008. As a result, advisers at Merrill Lynch are taking a more goal-based management approach to working with their clients.
“Coming out of 2008, investors have been more focused on understanding the risks that are in their portfolios, and as a firm, we’ve dedicated a significant amount of resources to make sure that our discussions with clients about risks and objectives are the best in the industry,” Williams said.
Other Programs
Other financial-services firms gung-ho on training new hires include Northwestern Mutual, which marked a 13% increase in recruitment in September from a year earlier. Northwestern is on pace to recruit more than 5,000 financial representatives in 2012.
Shawn Mackey, managing director in Northwestern Mutual’s Irvine office, said his goal is to add 18 new financial advisers at his office in 2012.
Applicants who are accepted into training programs like Merrill’s or Northwestern Mutual’s don’t always have a background in finance. They don’t always need one.
“We develop and launch people who are new in this industry,” Mackey said. “The first characteristic we’re looking for in someone is desire for growth. We’re looking for people that have the drive to build a business. There are lots of talented people, but the people that really have the drive to run and own their own practice make up a small percentage.” Elsewhere locally, TD Ameritrade has seen a 20% increase in investment consultants at its branches across the country since 2010 and considers Orange County to be a “growing market,” said David Lynch, TD Ameritrade’s managing director of retail sales.
Diverse Hires
Applicants to Merrill’s training program have varied backgrounds as well.
“Here in Orange County, what I’ve been really impressed by is the caliber of the talent,” Williams said.
A large percentage of Merrill’s trainees in OC are on their second or third careers, and have a good “baseline understanding of the importance of financial advisers,” Williams said.
“There’s a very strong talent base” in Orange County, where there is an “underlying entrepreneurial feel,” said Williams, who described the local talent pool as a “highly educated work force.”
Wedbush Securities is looking for a different kind of candidate.
The L.A.-based company, which has an office in Newport Beach, is focused on hiring more experienced advisers, those that have traditionally been at “wire houses,” said Wes Long, Wedbush’s executive vice president and head of private client services.
Its recruits are looking for “an environment where they can control their destiny, choose products and services that are in the best interest of their clients, and get the support they need,” Long said.
Wedbush had 18 registered representatives in OC in 2012, according to Business Journal data. It plans to raise the number of local advisers to as many as 30 during the next 12 months.
One of the key reasons for the uptick in Wedbush’s hiring is an increase in self-directed investors seeking advice on how to avoid investing pitfalls of the past several years.
“Our clients are asking for more guidance,” Long said. “Going into 2008, a lot of people got hurt because they weren’t properly allocated across different asset classes. People have learned a lesson and are asking for more diversification.”
Wedbush has just under 100 offices with about 400 advisers, nationally. The firm’s goal is to grow to 700 advisers in five years and 1,000 advisers in 10 years.
Growing Sector
“While the job market continues to be a challenge, there is a growing sector that proves to be a good opportunity for job seekers—the financial advice industry,” said Steven Mannebach, vice president of agency development at Northwestern Mutual.
“We’re seeing the demand for financial professionals continuing to steadily climb, especially as baby boomers slowly approach retirement,” Mannebach said. “However, while the need for financial professionals has been increasing, the talent gap has not filled in.”
