When firms set out to hire a non-experienced financial planner, they can choose to hire a new college graduate who will have a degree in financial planning, or a career changer who will have a certificate in financial planning. The differences between a certificate and a degree program can be substantial, and should be an important factor in deciding what candidate type to pursue.
In this month’s article, we will look at some of the other advantages and potential challenges in deciding between hiring a new college grad or a career changer.
Career Changer – A new financial planner that has worked in another career already likely has some good professional work experience. In addition, he/she has already had to make financial decisions for themselves over the years, from developing a spending plan and figuring out how much to save and how to allocate the funds in a 401k, to what employee benefits to choose, buying and selling vehicles, cars, or homes, and perhaps even reviewing legal agreements and negotiating lease agreements. Maybe they have even been through major life events, such as birth of a child, death of spouse, divorce, major job loss, or death of a parent. This kind of real-world “financial planning life experience” can be extremely helpful for the new career-changer financial planner to make personal connections with and relate to clients. Earlier in my career when I was in my early twenties, one of the toughest client situations I encountered was when a client called and said he and his wife were going to get a divorce. I wanted to crawl under my desk because I did not know what to say, and definitely could not relate!
College Graduate – While most new college graduates will not have the life experience that a career changer possesses, there are some that do, like candidates who are raised on a farm, have parents who are small business owners/entrepreneurs, have served in the military, or have completed a mission of service through their church or a non-profit organization. Another advantage of this group is that they tend to be much more flexible about relocation for the right fit, even if it’s across the country, because they are less likely to have family ties, concerns about employment for a spouse, or worries about the quality of local school districts. Furthermore, since they may not yet have many or any family commitments, they usually can get by on earning less income, which equates to a willingness to accept lower entry level pay. However, be aware that many will have significant student loan debt, and some have inflated salary expectations that are derived from a subset of their most successful colleagues, and sometimes even their professors.
Career Changer – Because of the career stage and income to which they became accustomed in their prior role, for career changers both current role/responsibilities, career trajectory, and compensation, all tend to be areas for potential conflict. Those that changed from a career where they experienced success are often confused on why they cannot earn the same income they were in their prior career with no experience. Others that have realistic expectations on compensation can still be frustrated with the fact that they have to learn from the ground up and they “shouldn’t have to fill that out or do that because in my prior career there was a team that did that for me.” On the flip side, prior working experience somewhere else helps some new career-changer hires understand and fully appreciate what some of the financial planning firms are offering.
College Graduate – The transient nature of new college graduates, today from the Millennial generation, has been a well-documented frustration of many employers. The fact is that they are only starting their careers, and their lives as adults, and sometimes need some time to find the correct path. In prior generations, changing jobs was not really in the cards, since leaving meant giving up the title, company car, and pension. Now the younger workforce has a wider range of opportunities scrolling in front of them, and less to tie them to a prior job. A few years ago, a team member at a firm we work with abruptly resigned from his position after working a year or two, so he and his spouse could travel the world for one year. He gave up a well paying stable job, and she gave up an even better paying gig at a Silicon Valley tech giant. Just as firm’s needs and wants sometimes change, so do candidates’ career and life needs change, but a hazard of working with college graduates is that their earlier life stage does create more potential that they will choose a different path.
For further insight, the chart below shares some additional perspective we have gained based on thousands of anecdotal conversations, decisions, and reactions with each group in the work place. New Planner Recruiting tends to place roughly an equal amount of both new college graduates and career changers. However, there does seem to be a trend recently that favors the hiring of “Someone who has a few years of work experience, even if it’s not necessarily any financial planning experience.” Also, realize that there will always be outliers, but this is a place for firms to start before engaging in the search and selection process.
|New College Graduate||Career Changer|
|Life Experience/Wisdom||Usually Low||Mid-High|
|FP Experience||Some; internships required to graduate in certain programs||Some; no internships but personal planning|
|Existing Biases||Usually none, but increasing||Can be substantial|
|Technology Familiarity/Skills||High-Very High||Low-High|
|Relo Flexibility||High||Low - Mid|
|Income/Financial Requirement||Low - Mid||Low - High|
As you can see, both groups have much they can offer to a growing financial planning firm. Use this as a framework as you envision who might be the best type of potential employee to integrate and excel in your firm. And for further ideas of how to weigh the benefits of a non-experience career changer or new college graduate, versus hiring a more experienced planner, check out our recent article in ThinkAdvisor as well!
In the meantime, if you have differing opinions, or anything else you would like to share, we would love to hear from you. Feel free to send your comments/suggestions to firstname.lastname@example.org