Less than 5% of financial planners are under 30, and with many advisors nearing retirement, leading experts are now reiterating the need for all firms to establish specific programs for attracting new talent to a rapidly aging industry.
“It’s vitally important that firms find new programs to welcome younger advisors into the industry,” said Peter Kahnert, senior VP at Raymond James Ltd. “People know that one of the most important things an advisor can do is have a good succession plan, for both the business and for clients.”
The average age of financial advisors in Canada has now reached 50 and as more and more creep closer to retirement, clients could be left feeling high and dry if businesses can’t find reliable replacements.
Joni Youngwirth, of the Commonwealth Financial Network, thinks the unfavourable perception of the industry as a whole may deterring the younger generation: “A lot of young people perceive the industry as being about making the rich richer” she said, “not helping the average family save for their retirement or put their kids through college.”
Between [Bernie] Madoff, the Facebook IPO and the financial crisis generally, things have not been good from a PR perspective for the financial services industry, adds Tom Nally, president of TD Ameritrade Institutional.
Gregor McDonald, of Vision Financial Planning, thinks some young people no longer perceive financial advising as a reputable career: “As [young people] are attending University in ever increasing numbers they feel that the financial services industry is nothing more than a sales job and they may want something more in line with their academic achievements.”
However, with an increasing number of advisors retiring and a poor recruitment rate, timing couldn’t be better for anyone wishing to join the industry and it’s important firms make potential advisors aware of this. “I think for both bright young men and women it’s probably one of the best times in many years to get into the industry” said Kahnert.
Wall Street recruiter Danny Sarch also highlighted the unrivalled security of financial advisors: “Financial advisors today who are compliance clean, who generate a substantive amount of revenue, have the most secure job in the world.”
Not only that, but many financial advisors enjoy high job satisfaction and both Kahnert and McDonald recommend the career to up and coming millennials. “It’s a great occupation for any individual to pursue,” said Kahnert, “it’s a great honor to assist individuals and their families with their wealth management.”
But with good job security, high personal satisfaction and competitive wages, it falls on the firms to attract advisors and provide guidance. However, we must see a significant push from leading firms to train and support the younger generation if the industry wants to avoid a shortage in coming years.