The registered investment advisor career has an image problem. College graduates and career-changers should be eager to join a strong and growing profession with great job prospects, yet misperceptions about who advisors are and what they do are hindering the profession’s access to new talent.
TD Ameritrade Institutional recently surveyed hundreds of students and career-changers and found they’re looking for positions with work-life balance, purpose and the potential for a strong income: all benefits of the RIA profession. And yet, the financial planning field is having a difficult time sourcing and recruiting enough new talent, even as tens of thousands of baby boomers get set to retire. Without expanding the pool of RIAs, the industry faces a shortage of advisors to serve future generations of investors.
Based on the research, here are a few of the most commonly held myths about the job:
It’s a math-focused, sales job. Being an RIA requires a great amount of emotional intelligence. You’ll often see clients in the aftermath of a life event, from a wedding to an unexpected death in the family. The job requires the tact and empathy to navigate difficult circumstances while possessing the hard skills to provide sound financial advice that is consistently in the client’s best interest.
You do the same thing every day. There simply is no typical day for an RIA. Some days may be filled with visiting clients; other days may be spent analyzing client data or attending quarterly meetings. Not every role in an RIA firm is the same: There are paraplanners and associate planners and lead advisors. Each role has different tasks, but one thing that’s common among them is the lack of monotony.
All RIAs look the same. There has admittedly been a homogeneity problem in the past, but the average age of RIAs is dropping, and firms are actively looking to recruit new advisors who reflect the communities they serve. In financial planning, diversity of all types is beneficial to the work RIAs perform for their clients. Clients want to feel the person providing them with financial advice has deep empathy for their unique situation, and that’s difficult when clients feel they have nothing in common with their RIA.
You just pick stocks for people. Sure, RIAs manage investments for their clients, but they can also help with tax planning, legacy planning, charitable contributions and a whole host of other services. An RIA’s main goal has always been to help people with their finances, but the understanding of what “finances” are has ballooned to encompass everything from which job opportunity to accept to which health care option to choose.
What RIAs Can Do
Here are five steps advisors can take to attract more people to the RIA career:
1. Boost awareness of the profession.
The best way to combat misperceptions of the profession is to talk about it. Become an ambassador and educate others about the RIA career path. Join networking groups, connect with local universities and program directors of financial planning programs and introduce the profession to students earlier in the education path. If your child has a career day, make sure you’re there.
2. Work with university program directors.
University program directors have limited tools and resources, so they need your help. Consider sponsoring a career day or offering scholarships to build awareness and positive associations. Remember that RIAs are helpers, so look outside financial planning majors to other programs that attract those who want to help people: sociology, social work, teachers, etc.
3. Create internships.
Offering internships shows that financial planning is a real profession to be considered. Not only does it raise awareness, it allows interns and employers to learn about each other in a low-risk environment. It provides an opportunity for firms to complete deferred projects and also allows development opportunities for all firm associates, who can help in the management and mentoring of interns.
4. Introduce diversity hiring programs at your firm.
It’s crucial to hire for potential and not financial planning experience. Learn how to rewrite job descriptions to attract a more diverse candidate pool (avoid gender-coded language, trim your list of must-haves, avoid corporate jargon and emphasize your firm’s commitment to the next generation of RIAs).
5. Build a career path.
Currently, two-thirds of top firms offer career tracks, but every firm should offer an established path for advancement. These clear paths create reasonable expectations, promote the idea of progress and bring a sense of fairness to the firm. As part of this path, make sure your firm creates opportunities to lead, implements an open-door policy that allows for a more horizontal structure, and consistently fosters both transparency and feedback.
Many students and career-changers would enjoy being RIAs—they just don’t know it yet. It’s crucial that we as a profession work together to overcome misperceptions about the industry and take steps to attract the next generation of talent.
Kate Healy is the managing director of Generation Next at TD Ameritrade Institutional. She is responsible for helping solve the talent crisis confronting the industry by opening the RIA career path to fresh faces—including new graduates, career-changers, military veterans and other groups that aren’t traditionally represented in the financial advice field.