If the students gathered at the Nasdaq Market Center on Wednesday are any indication, the future of registered investment advisors is in good hands.
The diverse group of financial planning undergraduates from universities across the U.S. were gathered in New York, along with university educators, to celebrate. For the fourth year in a row, TD Ameritrade awarded 12 students pursuing bachelor degrees in financial planning with $5,000 each in scholarships.
As part of these NextGen Financial Planning Scholarships, TD Ameritrade specifically includes two awards for students from under-represented demographic groups, to help increase racial, ethnic and gender diversity in the RIA industry.
Also, a total of $75,000 of grants were awarded to two universities to foster financial planning education: $50,000 to University of Houston for its established financial planning degree program and $25,000 to Delaware State University for its emerging financial planning degree program.
"We need to do a better job of bringing more young people into the profession not only because of the aging demographic of advisors but the shifting demographic within the United States," Tom Nally, president, TD Ameritrade Institutional told ThinkAdvisor while in New York. "Next gen … they are really building their own wealth and they're set to inherit a lot of wealth. They're going to want advisors that essentially are from their generation."
According to Nally, TD Ameritrade received about 250 applications for its student scholarships, and he said that number continues to grow each year.
Not only is this a sign that there is a growing awareness of the financial planning profession among young people, but Nally pointed to two more statistics.
"What we found for the first time in a decade, the average age of [certified financial planners] is under 50, which is great," he told ThinkAdvisor. "And also, the number of new advisors that are women is something like three to four times the industry average of total women in the space. So we're making an impact, and it's all the little things you got to do. It's about raising visibility, engaging the appropriate groups and spreading the word."
The Bureau of Labor Statistics predicts that jobs for personal financial advisors are expected to grow by 30% by 2024, more than four times the 7% growth rate for all occupations. But there aren't enough young people entering the profession to replace the older advisors who are nearing retirement age.
Both Chauncey Thomas, an undergrad at Florida State University, and Megan Manno, an undergrad at Louisiana State University, are aware of the need for young advisors in the industry.
"Since a lot of people are retiring, young people are needed to fill those spots," Thomas told ThinkAdvisor. "But also with emerging new investment strategies and instruments, you just need different perspectives, and young people can sometimes provide that."
Manno added that "with this massive amount of wealth being passed down to baby boomers, people are going to need guidance with how to invest and save."
