I've been attending advisory industry conferences for more years than I'd like to admit, and over the past couple of years, I've noticed a telling new trend: many advisors who go to conferences these days are primarily there to recruit young advisors. In fact, last month, at the recent TD Ameritrade Institutional conference in San Diego, most of my clients' only reason for being there was to network for recruiting.
This sea change in advisors' conference motives is the direct result of a challenge that we've been helping owner-advisors with for some years now: the biggest barrier to the growth of independent advisory firms today is their capacity to work with more clients. And so far, while some industry custodians and broker-dealers have started talking about this issue, the only one that I've seen offer serious solutions for advisors is TD Ameritrade.
In its literature about its "NextGen" programs, TD provided some context for the seriousness of the advisory industry's challenges. "The U.S. Bureau of Labor Statistics forecasts a 27% job growth rate for personal financial advisors through 2022, nearly three times the national average 11% rate for all occupations." At the same time, though, only 5% of advisors today are under the age of 35. Even worse, fewer than 700 students completed bachelor's degrees in financial planning in 2013.
To address this problem, TD rolled out a four-part solution for advisors. First, the custodian launched its "RIA NextGen Career Exchange:" a "free" job and resume posting site for RIAs looking to recruit and financial planning students and other young advisors looking for jobs. On it, job seekers can post resumes and search for jobs and internships, and advisory firms can post job and internship openings and search for qualified candidates.
This may seem like a no-brainer, and it is. Yet it's the first solution that I've seen which actually matches up students and young advisors with advisors looking to hire them. As an indication of TD's seriousness about it, there's no cost for either party.
TD Ameritrade's next solution it to help fill the pipeline of new financial planners. This year, TD will award 12 (up from 10 last year) scholarships that pay $5,000 a year to students pursuing a bachelor's degree in financial planning. And to help with their education, TD's NextGen Grant Program encourages the development and expansion of financial planning education. Last year, it awarded the University of Georgia a $50,000 grant and Texas A&M University $25,000, along with a separate, multi-year sponsorship to support the development of the school's financial planning program.
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