A tricky path when it comes to attracting – and hanging onto talent – in the financial sector?

Oh, sure, if you insist.

In the aftermath of surveying 531 talent acquisition leaders across sectors in the name of its 2023 Hiring Report, goodtime.io recently released the report’s financial services edition, shining the spotlight on how they’re performing those initiatives despite the challenges.

A few need to know takeaways within the prism of this year’s obstacles in financial services hiring:

• Hiring Goal Attainment Fell Short
• Top Previous Change: Recruitment Team Turnover
• Layoffs Hit Financial Services
• Top Expected Challenge: Limiting Hiring Technology
• Competitive or Uncompetitive Landscape? You Decide

Oh, and here’s an idea: with an eye on top producers, make a deal they can scarcely refuse, according to linkedin.com.

Ah huh; now you’re listening. With both ears.With younger advisors turning up the heat on their demands, the importance of an up to date technology stack in order to lure potential talent is hardly lost on firms.

“Good technology is a game changer and committing to the tech of the future will be very attractive to those being recruited,” said Jim Frawley, CEO and founder of Bellwether.

In an article for SmartAsset, Rebecca Lake CEFP shares some tips on successful retirement planning for financial advisors. While advisors spend so much time and thought into their clients’ financial goals, they don’t do the same for themselves especially given the complications of succession planning. Additionally, advisors can maximize the value of their practice by taking some proactive steps.

The first step is to figure out your ideal outcome and then create a plan to achieve the goal. The earlier that you can start taking steps towards this goal, the higher your chances of success. This could mean thinking of how to transition the business whether that means selling to employees, the highest bidder, or passing the business on to your heirs, and how it will impact clients and employees.

The second step is to figure out the value of your business and to consider getting a professional appraisal. This will help you make better decisions so that you can ensure a successful transition. 

Finally, advisors have to consider their own personal financial situation that is independent of their business to ensure a comfortable retirement. This includes all the major components of planning such as retirement contributions, insurance, life insurance for family, budgeting during retirement, etc.

Finsum: Many advisors don’t spend enough time on their own retirement and succession planning. However, this is an increasingly important issue given the aging of the wealth management industry.

In an article for SeekingAlpha, Principal Financial Group previews the third-quarter and lays out the opportunities and risks it sees in fixed income. Overall, the firm expects the asset class to have a modest tailwind given its expectations for a recession by the end of the year.

As evidence, Principal Financial cites the unprecedented tightening over the last 16 months, slowing economies all over the world, tightening credit standards, and the inverted yield curve. It believes that the next 2 hikes will be the Fed's last in this hiking cycle. 

However, the firm doesn’t believe the central bank will be successful in engineering a ‘soft landing’ despite this increasingly becoming the consensus position over the last couple of months. Instead, the firm anticipates a final lurch higher in yields with the breakout ultimately being rejected.

Amid this period of volatility and uncertainty, the firm believes that active funds are best positioned to take advantage of market conditions, and it sees the most upside in high-yield fixed income given that the firm’s base case is for a mild recession. 

Finsum: In Q3, Principal Financial Group sees upside for fixed income due to a softening economy, and it sees the most value in high-yield.

In an article for Reuters, David Randall  discusses the outlook for the energy sector in the second-half of the year, and why some contrarian investors are betting on a rebound. In the first-half of the year, energy underperformed the broader market despite economic growth performing better than expected, while OPEC countries embarked on supply cuts.

The major headwind for oil has been weak demand from Europe and China, resulting in oil prices that are down 10% YTD. Despite expectations of continued rate hikes in the coming months, many investors are increasing exposure to energy stocks due to attractive valuations and expectations of a pickup in economic growth. 

Supply cuts from OPEC should also support the market especially as domestic US production has also been trending lower in recent months, reaching their lowest levels since April of last year. 

On a valuation basis, the sector is quite cheap relative to the broader market with a cumulative forward price to earnings ratio of 10.4, while the S&P 500 has a forward price to earnings ratio of 19. The energy sector also pays a better yield at 3.9% vs 1.5%.

Finsum: Energy stocks underperformed in the first-half of the year following a strong 2022. Here’s why some are betting on a rebound in the second-half of the year. 

In a piece for FutureVault, Kristian Borghesan covers some important items that financial advisors need to consider for succession planning. This type of thinking is increasingly important given the boom of M&A in the space in addition to the aging of advisors in the industry.

Advisors want to ensure a smooth transition in their business to the next generation of advisors while ensuring that client satisfaction is not sacrificed. Additionally, both parties need to be aware of regulatory requirements as well as potential impacts on other employees at the firm.

The goal of succession planning is to ensure continuity of the business, retain clients, preserve the value of the practice, and transfer skills and expertise. Advisors and acquirers have a variety of options to choose from when it comes to structuring the transaction. Increasingly, many advisors are choosing to stay on as employees in a limited capacity to ensure a smooth transition. 

So much of the value of a financial advisor practice is due to the clients. Therefore, there needs to be a plan and transition period to ensure that relationships are successfully transferred to the new team. Some recommendations include joint meetings and a slow transition of responsibilities while maintaining active communication with clients during the transition process. 

Finsum: Succession planning is essential for advisors to ensure a smooth transition of their business and maximizing the value of their firm. Here are some important considerations.