A trillion-dollar wave of wealth transfer is approaching, and with that comes the need for veteran advisors to do some succession planning. To ensure the continued protection of wealth across generations even after they retire, they must be ready to groom a new generation of financial professionals — that is, assuming they could recruit new blood in the first place.
“As it stands, only a quarter of today’s advisor population is under the age of 40, according to the CFP Board,” wrote Trilogy Financial President and CEO Jeff Motske in an article on WealthManagement.com. “[O]f this, a mere 10 percent are under 35, Cerulli [Associates] reports.”
To help curtail that shortage, Motske recommended that financial-services organizations do more to accommodate young professionals’ need for work/life balance and dynamic experiences. That includes flexible work schedules, interactive office spaces, and other lifestyle benefits.
Focusing on the challenge of finding young talent, he suggested partnering with the business departments of local universities as an effective strategy, as well as LinkedIn’s recruiting tool. “[B]ut perhaps the most unusual and exciting way we’ve found recruits is via clients who decide they want to become advisors,” he added.
Philanthropic programs are another possible lure for young prospects. Noting the socially conscious nature of millennials, he recommended that firms adopt charitable matching programs to demonstrate their commitment to their employees’ passions and values. Such efforts could also provide a natural way for seasoned planners to bond with and help young planners find purpose in their work.
Another issue that Motske addressed is the need to set up young advisors for success. He noted a general trend of leaner investment in training, as well as added pressure on rookies to bring in clients within a fairly short time, among most major firms. He also pointed out the resistance of seasoned advisors, particularly those who have gotten comfortable with their current practice, to mentor the next generation.
To make their practices more relevant to young clients and recruits, Motske urged firms to integrate new technology resources that help people analyze their current financial situation. He also shared his firm’s practice of pairing new advisors with an experienced mentor for at least nine months, during which they get face time with clients and a salary as they learn the administrative side of the business.
“After that, the young advisor serves clients alongside an experienced mentor as a team,” he said. “All of our clients are served by these teams, which benefits the young advisor, the mentor and ultimately the client who appreciates receiving input from multiple perspectives.”
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