There seems to be at least one industry in America that still functions outside the law of supply and demand. I am referring to our own financial advisor sector, where time seems to stand still when it comes to hiring younger employees to meet the brisk demand for financial guidance from consumers of all ages. Research by Cerulli found that the average age of advisors is around 50, and 21 percent are over 60. On the flip side, less than 25 percent are under 40, and just 5 percent are under 30. Pershing Advisor Solutions projects that 237,000 new advisors need to be added over the next decade just to maintain the current industry total of 315,000.
The looming retirement of many senior advisors poses a serious threat to the health and vitality of all segments and types of firms in our industry. Why is there a lack of young professionals entering our field and what we can do about it?
Historically, it has not been easy for the college grad or someone with a bit of work experience to launch a career as an advisor, much less to build a solid practice. In the worst case, after a brief training stint, a beginner rep simply got a desk, a phone, a directory, and not much more than that to help locate some potential clients. It was either sink or swim. More advanced training certainly does exist today, but many formal programs have been scaled back due to seismic shifts in the entire financial services industry. Moreover, after any training that does take place, ongoing support and mentoring has not been consistently available.
Obviously, things need to change as we try to attract sorely needed members of Gen Y. There has been an outpouring of research and articles about the attitudes, ideals and career aspirations of this cadre. It is possible to over-generalize, of course, but on the whole these young adults possess characteristics and preferences that can make them good candidates to be highly successful as financial advisors or as key members of an advisory team. We need to be good communicators in explaining how the opportunities that exist match up well with this generation’s career goals and, yes, its ideals. Below are some prominent Gen Y attributes, based on our own experience:
- They like collaboration and teaming on projects, something they have engaged in from quite a young age.
- Networking via social media is interwoven into their lifestyle.
- Many are attracted to being entrepreneurs, or at least want to have a lot of control over the direction of their careers.
- While they value money, they also want to make a contribution to society.
Each of these generational attributes can play well in an advisory setting. The teaming that Gen Y enjoys is the wave of the future in our industry as client needs become more complex. Teams also offer multiple career paths, letting new young hires do what they do best and enjoy the most. As for social media, the skills that this group has in abundance can be innovative pathways to connect with clients and prospects in new, productive ways. And the entrepreneurial spirit that so many in Gen Y show drives our entire industry.
Evaluate Their Talents
Once hired, young recruits crave help and attention to get on the career track where they can utilize their talents. Steady mentoring from an experienced advisor and ongoing education from other specialists in the organization, as well as from external experts on topics such as new trends, products and marketing are also ways to keep a career on pace. If training can be offered online as well as in a classroom setting, that makes it much more accessible, too.
Gen Y associates value a workplace that offers some fun as well—whether it’s an informal, after-work get-together hosted by the firm to watch a sporting event like the World Cup, or an on-site charity fund-raiser where managers, like me, are dunked in a water tank by anyone who can throw a ball and hit the target.
Financial professionals make a valuable contribution to society, and we need to convey this message as we recruit on college campuses and elsewhere. All of us should seize and create opportunities to speak out about the social contribution the industry makes, from helping people enjoy a secure retirement, to financing a college education, to planning for a child with special needs. That is a message that resonates with many in Gen Y who are looking for a rewarding, meaningful career.
Paul Blanco is Managing Director of Barnum Financial Group, a part of the MetLife Premier Client Group.