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Recruiting the Next Generation of Financial Advisors

The talent shortage is real. Here's how to combat it.

By Jeff Motske

Cerulli Associates, a leading financial services market research firm, projects that more than one-third (35 percent) of financial advisors will retire in the next 10 years. In its wake, the next generation of advisors will inherit roughly $6 trillion of advisor-managed assets. This begets a crucial question: where will the industry find this next generation of advisors? As it stands, only a quarter of today’s advisor population is under the age of 40, according to the CFP Board, and of this, a mere 10 percent are under 35, Cerulli reports. 

Why is the industry experiencing this new talent shortage? Of the myriad obstacles, poor industry perception and a lack of necessary structure to engage and mentor promising young leaders are two worth noting. However, they can be overcome with a commitment to understanding millennial preferences in the workplace and investing in the necessary resources to inspire today’s brightest talent to choose financial advising. It’s an investment that will deliver significant returns for both advisory firms and their clients.

Understand Your Audience

The global financial crisis in 2008 rocked the world economy, impacting jobs, housing and consumer behavior and causing ripple effects in almost every industry. Yes, the bottom lines of financial services companies were greatly impacted, but what left an even deeper scar is the long-term negative impact on the industry’s reputation. Consider that for the last 10 years, young professionals learned about the financial services world through a lens of untrusting and finger-waving news media and pop culture. 

Compounding this issue is an overall resistance to change within financial services organizations. Whereas today’s young professional values work/life balance and dynamic experiences, so financial planning organizations could do much more to promote flexible work schedules, interactive office spaces and other lifestyle benefits.

Know Where to Find Them

One of our most effective ways to find young talent is to partner with local universities, particularly the business departments. Professor referrals and college career fairs are some of the best resources for hiring interns and entry level employees. LinkedIn’s recruiting tool has also proved very effective for us, but perhaps the most unusual and exciting way we’ve found recruits is via clients who decide they want to become advisors. There’s nothing better than inspiring a client to become so invested in personal finance that they decide to make a career out of it.

Cater to Their Values

Millennials are extremely socially conscious; they expect the organizations they work for to reflect their values. Charitable matching programs, in which employers match employee donations to a nonprofit of their choosing, are one of the most effective ways to demonstrate this. By showing that you support the causes that are most important to them, employers can demonstrate their commitment to each employee’s unique values and passions.

This approach also provides a natural venue for seasoned planners to bond with young planners over shared philanthropic values, while mentoring them on how to find meaning in their work. To avoid issues, make sure to set parameters for the program, e.g., the employer will match $1,000 per year to a 501(c)3 of the employee’s choosing when they provide a valid contribution receipt.

Put in the Time

When it comes to talent retention, it’s important that experienced advisors recognize the key barriers young advisors face. Most of the major firms have cut back on training programs that equip young advisors to do well. This, coupled with minimum requirements to bring in clients and assets within a fairly short period of time upon joining the firm, is a recipe for failure. Young advisors are not being equipped with the necessary tools to feel vested in their firm or meet their metrics to remain employed. 

A similar challenge exists with older advisors’ lack of willingness to mentor younger advisors. The average advisor is 62 and comfortable. After building a book of business over several decades, most seasoned advisors have a steady lifestyle and are not easily motivated to invest the time and energy to mentor new talent. This lack of support, combined with outdated work/life balance expectations, truly limits the industry’s appeal for great new talent.

Give Them the Necessary Tools

Today’s digital natives expect a tech-savvy work environment. While we’re now accustomed to technology at every turn in our personal lives, fintech is still relatively new and not completely integrated within financial planning environments. Firms should be taking advantage of new, but underutilized technology resources that help clients analyze their current financial situation. Not only will this make the profession more relevant to fresh college grads, it’s an opportunity to leverage their innate digital prowess to help shape the future of financial planning. 

Set Them Up for Success

Instead of throwing new advisors right in and waiting for them to sink or swim, we pair new advisors with an experienced mentor to shadow them for a minimum of nine months. During this time, they have no one-on-one client interaction and receive a salary while learning the administrative side of the business. After that, the young advisor serves clients alongside an experienced mentor as a team. 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.

Whether your goal is to grow your book of business, increase revenues, create a succession plan or simply take work off your plate, advisors can’t afford not to invest in the next generation. By devoting the energy, time and resources to recruiting and retaining young advisors, you will reap the benefits.


Jeff Motske, CFP, is president and CEO of Trilogy Financial, a privately held financial planning firm headquartered in Huntington Beach, Calif. He is the author of The Couple's Guide to Financial Compatibility and the host of “The Jeff Motske Show,” where he guides listeners through proven steps toward financial freedom. 


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