Building a book of business 20 years ago was a simple matter of coming to the office every day and pounding the telephones in the hunt for clients. By sheer dint of putting in the hours, you could create a practice.
It doesn’t work that way anymore. Potential clients are harder to reach via telephone, and they’re savvier and more demanding customers when you actually do get through to them. So it’s no surprise that a new report by Charles Schwab shows younger advisors are feeling more pressure in the business.
Advisors under the age of 40 are more likely than their older peers to feel pressure to grow their book of business, or to focus on selling proprietary products (See chart below.) They’re also more nervous about keeping clients when switching firms—among advisors 40 and older, 85 percent feel clients were more loyal to advisors than to their firms; that drops to 64 percent among advisors younger than 40.
The Schwab poll data suggests that the younger crowd see independence as a way around some of those problems. The share of the under-40s who view the registered investment advisor model as appealing was sharply higher than those older: 65 percent versus 43 percent. For a rundown, check out my full story on the Registered Rep. website. One thing I noticed: the two under-40 advisors I spoke with at Raymond James & Associates weren't running for the door. Managing your own RIA—or any other independent business model—comes with its own challenges, too.
The poll surveyed 200 advisors in non-RIA channels; 36 percent were under 40.