Why High School Is High Time to Engage Next-Gen Advisors
With summer here, and another college graduating class out in the real world looking for jobs, the financial-advisory industry is faced with a great opportunity. Never has a career in advising been more attractive. Financial advisor ranks in the top five of U.S. News and World Report’s business job rankings. Plus, the space is growing, with more than 60,000 new jobs expected in the next seven years — according to the U.S. Bureau of Labor Statistics. At the same time, awareness is still low, and a career in financial advice doesn’t have the same sex appeal as one in Silicon Valley. Advisory firms are faced with a seminal question: How do we attract talent to an industry that a lot of young people don’t know much about?
Many answers will revolve around college recruiting, calling advisors to actively seek out the best talent on campus. While that’s an option, it’s not the best option. Recruiting — or really, educating — needs to start earlier. For me, some of the education started at home, where my parents often had CNBC on in the background during dinner. But I also had experiences in school that helped shape my decision-making. My high school brought in a financial advisor to explain the stock market, and it opened my eyes to an area that I didn’t know anything about. That eventually led me to an internship with what was then named TD Waterhouse — now it’s TD Ameritrade — where I frequently dealt with clients. It also set me down the path to becoming a financial advisor.
Knowing the profound impact these experiences had on me, I believe it is important to pass on my experiences to the next generation. I encourage others in the industry to join me by reaching out to local schools and students in their area. Once we get in front of them, we need to get them excited about the opportunities that exist in this field. Below are three key messages to share with young people, and why they might be particularly appealing to them.
Message 1 — The Advisor Pipeline Is Dry: The average age of financial advisors in the U.S. is about 51, and just 11% of advisors are younger than 35. Advisors are getting older, and there’s nobody to take their place. And with baby boomers approaching retirement, we’re looking at one of the largest wealth transfers in history — $16 trillion, by some accounts. Many of the newly wealthy don’t know how to manage their own money and will need help from a group of advisors that grow as they do. We must emphasize with young people that new leaders will be needed to fill the advisor pipeline. Fortunately, today’s youth is much more interested in leadership in their chosen field than previous generations have been.
Message 2 — Greater Independence Goes Along With Higher Income: Entering into the world of financial advice opens up an independent career path, where young advisors can own a business and enjoy the flexibility that comes along with ownership. They can grow the business as large as they want it to be. They are the decision-makers. The financial rewards are good, and disruptions to the landscape are making them even better. Technology, for example has gone from being a novelty to a necessity. That gives the next generation — which grew up on technology — the opportunity to rise to the top of the evolutionary curve and advance quicker financially than ever before. According to a U.S. Department of Education study, the average 2015 graduate will leave school with more than $35,000 in debt. That number stands to rise as college tuitions reach new heights. To try and avoid this fate, a young person might find a financially secure career like financial advisor particularly attractive.
Message 3 — We Help People Reach Their Goals: Today’s advisor needs to be what we call an “advocate advisor.” Advocate advisors are the personification of the social responsibility that the next generation has increasingly emphasized. They do the tough work and fight for their clients, taking pride in their ability to help their clients navigate an increasingly complex environment. They are bulldogs, sorting through the complexity to help people choose what strategies and products will protect them in any financial environment. If people encounter an unexpected cost or downturn in the market, a financial advisor works with them to find the best path to financial well-being. We need to let young people know that there is a rewarding satisfaction to helping people reach their goals that is unique to the financial-advisory space.
The opportunities for future financial advisors are vast, but the opportunity isn’t only for them. Winston Churchill once said, “An optimist sees the opportunity in every difficulty.” In the financial world, where advisors have found it difficult to attract young talent, firms have an opportunity to reach out to the younger generation and facilitate financial proficiency from an early age. My past experiences gave me the poise to approach this more adventurous career rather than picking something safer like accounting or government work. We need to instill that same confidence in young students so that when they start to think about their future, they have the confidence to become financial advisors.