Pershing Advisor Solutions' CEO Mark Tibergien was an early and vocal proponent of the serious industry need to attract and retain younger advisors to replace departing (and dying) advisors, citing data that since 2008 there are 50,000 fewer professionals in the industry.
That decline is coming as the demand for advice increases in lockstep with the rising number of retired or nearly retired boomers. In an interview for the IA 35 for 35 in May, Tibergien reported that PAS has seen a rise in younger principals at firms, and that larger RIA firms in particular have become "more systematic" in finding new employees. However, he said the broader issue is "whether we've conditioned the population to see" the advisory profession as a "good career choice."
Rather than just preach about this issue, Tibergien has for over 10 years been doing something, and something quite personal, about it. Wondering where he "could make an impact," he followed the example of Jim Joslin, chairman and CEO of TFC Financial Management in Boston, by funding a financial literacy program at his high school alma mater—Gladstone High School—in the Upper Peninsula of Michigan (Joslin founded a similar program at his Edina, Minnesota high school).
Drily noting that "incrementalism shouldn't be denigrated," Tibergien's long-time funding of a personal economics course for high school seniors may well lead to more recruits for the financial advice business, he hopes, but "at a minimum" will also produce "more informed consumers."
At the Pershing Insite conference in Orlando in early June, Tibergien and the teacher of that Gladstone High course, Erika Fix, made a TED-like presentation on the program. Tibergien encouraged attendees to make similar investments in their high school alma maters, saying that even a small investment can have a big impact. They suggested advisors start by visiting the #buildfinancialfutures Twitter page (and reading the Champlain College Center for Financial Literacy's "National Report Card on State Efforts to Improve Financial Literacy in High Schools").
In her presentation and a separate interview, Fix presented the scope of the financial illiteracy problem, and suggested a solution that she and other personal finance teachers can provide.
Teenagers, she said, are the "No. 1 credit target," payday loan lending "is one of the fastest growing industries in America" and over all, Americans now owe $1.2 trillion in student loan debt. "The financial world is more complex" today, said Fix, and teenagers live in a world of "mass consumerism." If they sign up for the credit card solicitations they get, they run a serious risk of falling into a "debt trap."
But hold on, they're teenagers, right? Shouldn't their parents be teaching their children these important skills? First, Fix said, most parents aren't comfortable talking to their kids about the family's finances, which is especially true if the parents are poor. Moreover, many adults are far from being financially literate, and that's the case for even some of the most educated and wealthiest Americans (see "MDs Need More Financial Literacy, Too"). An FDIC report found that 28% of adult Americans are either unbanked or underbanked, and a separate survey found that 40% of adults would give themselves a grade of "C" or lower on their knowledge of finances.
