In the early years of financial planning, the reality was that most advisors only needed one skill to be “successful”: the ability to sell, and get clients. After all, when advisors are solely compensated by commissions, if you can’t keep finding new prospective clients to sell to – and actually sell something to them – your income will quickly go to zero.
As financial advisors have shifted to the AUM model though, and the recurring revenue it supports, the requisite entry level skillset has shifted. Now for many advisors, the key abilities are technical competency to give the right advice, and empathy skills to form and deepen the client relationship. Sales and business development comes later, if at all.
And as advisory firms have grown, for many the emerging skills gap is in the area of management, from training and developing other staff members, to the overall execution of the business.
From the career track perspective, what this means is that for financial advisors to progress in their own careers, it becomes necessary to expand their expertise across more and more of the domains – generally at least three of the four. And for advisory firms themselves, the four skill domains may provide a helpful roadmap to consider where the firm should invest resources to improve the team for the future!