The next generation of advisors is so different from traditional advisors, right? Well, while this may be a popular theory, it appears that they have much more in common than many think.
According to a recent survey of advisors under the age of 45, their background remains remarkably similar to the supposed “old guard”. Generally speaking, the majority of next generation advisors are still white males with a college graduation. They also usually have degrees with a business focus – such as economics, business administration and finance. In fact around 86.5 per cent are white and four fifths are male, suggesting that even though many companies are making efforts to attract more diverse candidates there has yet to be a significant impact on bringing people of different cultural backgrounds into the fold.
Perhaps of greater concern is that the industry is still failing to reach young people while they are at college. According to the survey, 66.9 per cent took on the job after doing something else; while 63.5 per cent hadn’t contemplated becoming an advisor during college.
Meanwhile, the reasons for leaving a firm were also very similar. In excess of half of the respondents believed better compensation to be a reason to jump to another company; while 45.4 per cent placed more flexibility and growth opportunities at the top of their list. Meanwhile, 28.7 per cent highlighted better benefits as a reason to make the change.
As for staying with a firm, the top reason is the ability to serve clients in a better way; with independence also highlighted.
However, there is a key differential between next generation advisors and older colleagues: new financial tools are being embraced by the younger generation. Three out of four of those under the age of 35 have trialled robo-advisors, at least for account opening and rebalancing.