The financial advisory profession is facing a looming talent shortage. According to Cerulli, 71% of the advisor population is over the age of 45, and the average advisor is 51½ years old.[1] As these advisors reach retirement age, some 8,600 are expected to leave the profession every year for the next 13 years, thinning the ranks of advisors at a 2.7 percent annual clip.[2] Unfortunately, for every eight advisors that retire, only three are trained to replace them.[3]
Replenishing the ranks of older advisors with younger advisors is one of the major challenges the industry now faces, and this challenge exists on at least two fronts. The first is the issue of succession planning for established advisory practices in which the principals are at or close to retirement age and looking to pass the torch to the next generation. The other is simply finding and attracting enough viable candidates among Gen Y[4] to fill the expected volume of job openings in the coming years.
In response, many firms are taking steps to think differently, create new strategies and implement programs to boost their recruiting efforts. Unfortunately, in some cases those efforts may be hindered by some existing misconceptions.
Uncovering Common Misconceptions
One commonly held misperception is that there is a widespread lack of interest in the financial advisory profession among Gen Y, but the Fidelity® Recruiting Redefined Study (Fidelity study) revealed that lack of awareness, not interest, is a more relevant factor.[5] Only two in 10 college students and young professionals responding to the Fidelity study were familiar with the financial advisor profession, but after learning more about it, almost half indicated they would consider it.
The Fidelity study identified a number of false impressions that can exist among Millennials[6]: that you need licenses and certifications to be a qualified candidate, that sales activities are the most important part of the job, and that the profession doesn't offer the kind of opportunity to help others that is so important to many in this age group.
That last point is an important one for firms looking to tap the Gen Y talent pool. In a 2013 survey of 1,000 collegeeducated men and women born since 1980, 84 percent agreed with this statement: "Knowing I am making a difference in the world is more important to me than professional recognition."[7]
According to the Fidelity study, too few Millennials currently see a financial profession as a pathway to making a difference, largely due to limited awareness of this career among college students.
The Fidelity Recruiting Redefined study identified three steps that firms and others seeking to recruit young talent to the financial advice profession may want to consider taking.
– Continue to full article.
– See also:
- Recruiting Redefined
- Take the Quiz: Perspectives on the looming advisor talent shortage
- 2013 Fidelity® Millionaire Outlook Executive Summary: Gen X/Y Millionaires Not Sitting Idle
[1] Cerulli Quantitative Update, Advisor Metrics 2013, Understanding and Addressing a More Sophisticated Population, Cerulli Associates.
[2] Ibid.
[3] Ibid.
[4] Born from 1980 to 1992.
[5] Fidelity® Recruiting Redefined Study, September 2014. References to the "Fidelity study" are statistics from this study unless otherwise indicated.
[6] Born from 1980 to 1992; also known as Gen Y.
[7] Millennials in the Workplace, Bentley University's Center for Women & Business, August 5, 2013, http://www.bentley.edu/centers/centerforwomenandbusiness/millennialsworkplace.
