It’s no secret the advisory workforce is getting old. On average, advisors are over 50, according to Cerulli. Less than 5 percent are under the age of 30.
So as baby boomers in the office retire, branch office managers looking to fill the void will have to dip into the demographic pool known as “millennials” those individuals born between 1980 and 2000. And while it’s always a bit disingenuous to speak in sweeping generalizations, demographic experts say the younger generation has vastly different expectations of how to be recruited, managed and led.
“These people represent the most ‘over-supervised’ generation in history,” adds Bruce Tulgan, founder of management consultancy Rainmaker Thinking in New Haven, CT, and the author of Not Everyone Gets a Trophy: How to Manage Generation Y.
“They really need and want the human element—coaching, direction, support and shared wisdom—to help guide them through the tidal wave of information that’s at their fingertips,” he says. “They also want a structured training process, where the agenda or the syllabus is placed in front of them early so it’s easy to follow, and they know the [desired] outcome.”
That’s different than the boomer generation, which, by and large, values autonomy over supervision.
“Boomer FAs value creating their own business plans, setting their own goals, and they are happy to live with the results,” says Paul Werlin, president of management consultancy Human Capital Resources. “Millennials,” on the other hand, want a manager who offers guidance and lays out individual training and operating curricula.
“Gen Y loves being part of a team,” Werlin says. “They were often taught in classrooms where students and teachers sat together in a circle. In general they are confident, very social, and socially aware. They celebrate diversity in the workplace, and they are obviously enormously tech savvy.”
They also seek ongoing feedback so they can continually improve their job performance, and transparency, so they understand how they are contributing to the bigger picture.
“When they were growing up, no one left them alone for a minute,” adds Tulgan. “They have very high expectations when it comes to virtually everything, and they’re used to having very supportive relationships across the board.”
Werlin suggests one strategy for office managers would be to help incorporate Gen Y advisors into older, established teams, where they can add their tech savvy and perspective, and where clients can see that they’ve learned the ropes from experienced practitioners.
In addition, too many employers are still using the one-size-fits-all career path, and often dangling incentives for recruits that won’t pay off for several years. Boomers may have responded to that kind of long-term appeal. Millennials won’t.
“Given the rapidly-changing world in which they grew up, this generation isn’t wired to view the long-term picture,” he says. “Talk about a five-year plan, and most will think you’re trying to sell them a bridge.” Instead, talk to them in terms of short-term goals. “Then, they can see how their efforts create even greater success down the road.”
Gen Y-ers also want a sense of balance in their lives. Things like flexibility of location and schedule, permission to telecommute, and earning social capital can be as equally important incentives as money— especially when they’re getting started.
They’re typically more concerned with life success than meeting a number, says Werlin. “They really want a sense of fulfillment from their jobs. As a BoM, of course you are concerned with their numbers. But you need to come across as their advocate, supporting them in their life goals and the causes that are important to them.”
At the same time, some office managers say that compensation is, as always, key. “Whichever quartile a young advisor ranks in terms of assets and new accounts after one year, we’ve seen there’s a 90 percent chance he’ll rank in the same quartile after five years, and very often even after 10,” said a long-time wirehouse office manager in the northeast who requested anonymity. “I think it’s incumbent upon firms to compensate top quartile producers well. If you don’t set them up on an incentive system, it’s going to be very easy for another firm to steal them away.
“It’s been shown that these reps are often very loyal to managers who recruit them and treat them right,” he continues. “They view you as the person who gave them their first break. But, they also need to feel appreciated.”
