So far, industry efforts to attract young advisors to the profession have been fragmented and slow-going. But the industry’s regulator is having its own problems recruiting next generation talent.
“I can tell you that it’s difficult for us at FINRA too,” said Susan Axelrod, executive vice president of regulatory operations at the Financial Industry Regulatory Authority. “It is not easy filling regulatory jobs, especially when our examiners are on the road a lot, sometimes 4 to 6 weeks at a time—and this, on top of being knowledgeable about complex products and business models as they change.”
FINRA has about 3,400 employees, according to its most recent annual report. But the agency did not immediately provide specific figures for how many of those employees are millennials and how many have been hired in recent years.
Finding and nurturing talent is always a major business challenge in any industry, but particularly challenging in financial services, Axelrod said in a speech at the Securities Industry and Financial Markets Association’s NextGen seminar on Wednesday.
But it’s a critical function for the advisor industry to continue to best serve clients. For every eight financial advisors that retire, only thee new ones are trained to replace them, according to a 2014 report from Fidelity. Meanwhile, the Bureau of Labor predicts that the number of jobs for personal financial advisors to grow 27 percent between 2012 and 2022, a much faster rate than any other occupation, Axelrod noted.
To attract younger talent, the regulator started with hosting an ongoing series of internal discussions with its employees. The result? Millennial employees said they wanted more opportunities for rotational assignment that would provide more exposure to different groups, service lines and project teams, Axelrod says.
With that in mind, last year FINRA created a job immersion pilot program with small group in the New York office. Through the program, younger employees were given the opportunity to explore alternative career paths and expand their knowledge of the industry and FINRA overall. Axelrod said Wednesday that the regulator is reviewing the results of the program to determine if it’s worth expanding to a wider audience.
FINRA is also emphasizing the available growth opportunities throughout the organization. Axelrod cited studies that have found that millennials’ tenure at an organization is usually shorter than their older counterparts. The median tenure for employees aged 25-34 is three years, compared to 10 years for employees aged 55-64.
“The job of retaining young professionals is just as challenging as attracting them,” Axelrod says. But the studies also show millennials want a variety of experiences, rather than a variety of jobs, so FINRA is working to provide that experience.
Additionally, last December, FINRA’s women’s network hosted an inter-generational conversation where millennials provided insights on how best to manage them; flexibility was key, as well as providing a mix of formal and informal communication.