Despite all the talk about the aging financial advisor force, the industry still has a problem attracting and retaining young talent. But several Wall Street firms discussed their new techniques for bringing millennials into the business during a Securities Industry and Financial Markets Association seminar on Wednesday.
Speakers at the seminar quantified the aging advisor problem: a Cerulli study found the average advisor is older than 50; a third of advisors plan to retire in the next 10 years; and only 11 percent of advisors are under the age of 35. Just 5 percent are younger than 30.
Millennials -- those born between 1980 and 2000 – tend to be skeptical of the financial services industry.
“Only 9 percent of millennials that were surveyed saw our industry as an industry of choice for them,” said Mark Barickman, a global staffing executive for Bank of America Merrill Lynch. “What’s even more concerning to me was that 24 percent of those surveyed understood what we do.”
To understand why recruiting the next generation of advisors is such a challenge, the industry needs a better understanding of what millennials are looking for in a career.
They are smart, educated and tech-savvy, said Racquel Oden, head of advisor strategy and development at Merrill Lynch Wealth Management, but also motivated differently.
“Everything they do, they want to make sure there’s a purpose to it, and you’ve heard the concept of that balance,” Oden said. “Looking for that balance where it isn’t about working thousands of hours.”
In a 2014 Fidelity report, young financial professionals and college students named having a good work-life balance as the most important factor in choosing a career, said Amanda Smith, a senior vice president and head of marketing at National Financial. Millennials also value a career that impacts the lives of others, offers job security and fosters a collaborative work environment.
While advisors may say these are all benefits to being a financial advisor, millennials ;don’t see it that way. They see too much pressure to sell, and nothing turns off a millennial like the prospect of cold-calling, Smith said.
Angela Ruffin-Stacker, the first vice president of diverse financial advisor strategy, integration and growth at Wells Fargo Advisors, said traditional recruitment methods don’t resonate with millennials.
“We’re trying to also just appeal to the emotion side of why they should get into this business,” Ruffin-Stacker said, echoing the millennials’ need to help people and change lives. “Really, it’s all about making sure that the work which we are conveying is really interesting.”
Karen Larson, a manager of talent acquisition at TD Ameritrade, said firms could connect by making social responsibility part of the company’s core values and philosophy, and offer millennials a flexible schedule that allows them to participate in community service.
Perhaps the biggest difference between millennials and their older counterparts is their lack of motivation by money. Instead, the younger generation tends to value the development of new skills and achieving personal goals over boosting head count and “making it rain.”
Larson emphasized college internship programs, exposing potential employees to professional business acumen and personal interaction with senior executives.
According to Smith, one in five millennial advisors start at an internship program.
Barickman said Bank of America’s program found benefits for veterans as well as rookies.
“There’s nothing better than a 10-week inculcation into the business for the individual, but also for our seasoned advisors to be able to experience what the millennials can bring to the business first-hand,” Barickman said.
One thing they bring is their tech-savvy. Kevin Wallace said Janney Montgomery Scott is leveraging this by training millennials first in new technology platforms to get more value out of tools and help senior advisors use them.
“It’s a different experience learning to be an advisor in 2015 than it was in the 80s or 90s,” Wallace said. “New advisors can jump right in and generate value for the firm with technology right away.”