It may not be news that the advisor community is facing a labor shortage just as demand for professional advice is peaking. What is news is the scale of that shortage, and three overlooked trends are already playing out with the potential to make that shortage a catastrophe.
Men account for the overwhelming majority of existing advisors—around 80% or even more among some sectors of the advisor community. Moreover, a very large chunk of advisors—43%, according to Cerulli—are in or nearing their traditional retirement age. Finally, the percentage of advisors who are women has not appreciably increased since the industry began keeping track of that statistic.
In our recruiting efforts we've been tracking three megatrends that are likely to make this difficult situation even more challenging as we try to figure out how to get more potential candidates interested in our industry. In this article we'll explore those three trends and conclude with the only plausible solution.
Here's a spoiler alert: That solution involves people without a Y chromosome.
Trend 1: Fewer Men
Male academic success is plummeting, resulting in fewer males to replace the retiring (and the dying)
Since the 1970s, boys have been languishing academically while girls' test scores have been soaring. In her book, "The War Against Boys," author Christina Hoff Sommers zeroes in on statistics that paint an alarming trend: Women in the United States are earning 57% of bachelor's degrees, 60% of master's degrees and 52% of Ph.Ds.
Girls have been outshining boys on almost every measure of classroom success—grades, membership in honor societies and student government, participation in school newspapers, in the amount of homework completed and number of books read. Meanwhile, boys' test scores and graduation rates are falling off a cliff.
Many universities are trying to avoid what they call the enrollment tipping point, which is when the ratio of female to male students reaches 60/40. According to Sommers, when male enrollment falls to 40% or below, women begin to flee college campuses as they start to resemble retirement villages, with crowds of women competing for a handful of men.
Why It Happened
Much of the decline in male academic success has its roots going back to the 1970s, when it was thought that in order to have a gender-equitable society, normal male behavior was problematic in the school environment. Schools placed a greater emphasis on teaching boys to be less volatile, competitive and aggressive. Dodge ball is almost non-existent. Many schools have cut back on physical outlets altogether.
The 1970s also saw the advent of progressive teaching standards that divorced themselves from old-fashioned pedagogy—structure, discipline and skill- and fact-based learning. Instead, the trend moved to classrooms that were not teacher-led, favored creativity and focused on enhancing children's self-esteem. Author Sommers notes that, "This new enlightened teaching style encourages teachers to 'teach the student, not the subject' with precepts such as 'good teaching is not vase-filling; rather fire-lighting.'"
Sommers tells a story of a Chicago public school teacher's experience reinstating the old style of teaching, which is condensed here:
Mrs. Dougherty was a highly respected sixth grade teacher who could always be counted on to bring the best out in her students. One year she had a class she found impossible to control, seemingly un-teachable. She began to worry that many of them might have serious learning disabilities. One day when the principal was out of town, she entered his office and looked into the files that listed student IQs. To her shock she found a majority of the class was way above average in intelligence. A large cluster was in the high 120s, several scored in the 130s and one of the worst classroom culprits was, in fact, brilliant. He had an IQ of 145.
Mrs. Dougherty was furious because she had been feeling sorry for these kids and was going easy on them. She went back to her class and read them the riot act. She doubled the homework load, raised the standards and gave draconian punishments to any malefactor. Slowly, performance began to improve. By year end, this class was the best behaved and highest performing of all the sixth grade classes.
The principal was delighted and asked Mrs. Dougherty what she had done. She told the truth about looking up the children's IQs. The principal forgave her and congratulated her. Then he said something surprising. "I think you should know, Mrs. Dougherty, that those numbers next to the children's names are not IQ scores. They are their locker numbers."
The old-fashioned pedagogy gets amazing results, Sommers concludes. This is especially important for boys, for without such frameworks, boys will drift. And when they drift, it is nearly always downward. England and Australia have had these same issues with boys falling off a cliff academically and concluded that progressive methods in education are a prime reason why their male students are so far behind the girls.
British educational leaders now believe that the modern classroom fails boys by being too unstructured, permissive and hostile to the spirit of competition that provides boys with the incentive to learn and excel, according to Sommers. She warns that the looming prospects of an underclass of poorly educated, barely literate American boys has yet to become a cause for open concern among American educators or political leaders as it has in the U.K.
Labeled and Medicated
Besides our teaching system failing boys, we also see a trend of squirmy boys, more so than girls, being labeled with a quick diagnosis of attention deficit hyperactivity disorder (ADHD), which results in many boys being medicated. In his book "Boys Adrift," author Leonard Sax explains that the syndrome we call ADHD has probably always been with us. Despite some claims to the contrary, ADHD was not invented 30 or 40 years ago by drug companies eager to sell more medications.
In his book "Why Gender Matters," Sax told a story of a boy who needed to be on multiple medications for ADHD when he was in school. However, while assisting a professional hunter in Zimbabwe, he didn't need the medications at all, even when he had to sit motionless in the bush for long periods of time. Now the boy has gone on to college and has published poems and short stories in his college's journals—without taking any medications for ADHD.
In 2007, boys were 30 times more likely to be taking medications than they were in 1987, Sax wrote in "Boys Adrift." Studies suggest that these stimulant medications prescribed for ADHD may adversely affect children, with studies showing a negative impact on learning and motivation.
Another factor that may be affecting boys' performance is frequent video game use, which has shown to have similar effects on the brain as ADHD medication. Sax explains that video games stimulate a part of the brain called the nucleus accumbens in much the same way that crack cocaine affects the same area. Video games have the power to displace and distort the motivation of boys and young men so that they no longer have the same interest in real-world success.
For an independent advisor to build a book of business takes self-motivation, drive and academic achievement. Current trends show that boys are being assaulted on all fronts, pointing to fewer young men qualifying to be candidates for our industry. Sommers said of the job market impact, "All of the net job growth in America has been generated by positions that require at least some post-secondary education. The new passport to the American dream is 'education beyond high school.' And today, far more women than men have that passport."
Trend 2: Fewer Babies
Low birth rates and young people's failure to launch lead to prolonged dependence
For a country to maintain a steady population, it needs a fertility rate of 2.1. If the rate falls below 2.1, the country will decline in population, says Jonathan Last, a journalist and author of "What To Expect When No One's Expecting." America's fertility rate currently sits at 1.93 and is dropping steadily.
My nephew is a prime example of today's fertility dilemma. His wife has a Ph.D. in psychology and is a practicing child psychologist while he is a practicing attorney working monstrous hours as he seeks to become a partner at his firm. To date, they have no children. Last year in a discussion with my sister I asked how the prospects for grandchildren were looking. She paused and said, "Not good."
Statistics provided by Last make sense as to why. Fertility rates of those living in cities are lower than in rural parts of the country. My nephew's wife ranks at the bottom of the fertility scale by being a highly educated Caucasian woman. (White females with a graduate degree have a 1.596 fertility rate. Those with a bachelor's degree hover at 1.632; high school graduates sit at 1.947, and those who have not graduated from high school come in at 2.447.)
