Stop competing with other firms to hire proven financial adviser talent and start cultivating some of your own.
That's the message of a Pershing LLC white paper released Wednesday.
As many as 500,000 students coming out of American colleges and universities every year could be interested in a career in the financial advice business, yet the number of young people entering the business isn't even keeping pace with the number of professionals retiring each year, according to the report, which is based on a survey of college students.
Industry studies show financial services firms will need to add at least 237,000 new advisers over the next decade to meet demand. But training programs have been cut at many firms and the industry focuses on hiring experienced brokers, creating a so-called talent war.
"Gen Y brings fresh perspectives, new ideas and modern skill sets that can help businesses prosper now and in the future," said Kim Dellarocca, head of practice management at Pershing. "It is critically important for the industry to better educate students about the benefits of pursuing a career in the advisory business."
Only about 25% of college students are familiar or very familiar with the advisory profession and 7% are interested in actually becoming an adviser, according to the Pershing survey of 500 students 18 to 24. It included about 100 business students, 28% of who were interested in the career.
The report recommends that advisory firms reach out to young people in the settings in which they learn about careers, which is primarily through internships and employment websites such as Monster.com.
But "interns" shouldn't be thought of as cheap summer help good only for answering the phones during employee vacations, said Craig Pfeiffer, chief executive of Advisors Ahead LLC, which places students and graduates in structured internships. Interns should be learning about the business and developing relationship skills, while advisers should be looking at whether these young workers would make good employees.
"It's a challenge in the wealth management industry to see people valued as an investment, and not seen as an expense," said Mr. Pfeiffer, who used to be a mssb.htm" title="http://topics.investmentnews.com/companies-and-associations/morgan-stanley-smith-barney-mssb.htm">Morgan Stanley Smith Barney executive vice president.
He said Gen Y, which includes everyone from 18 to about 30, offers a great opportunity for advisers as employees. They either grew up during the 2008 financial crisis and watched their parents deal with that stress or they were young adults themselves trying to establish a career in the middle of it, he said.
"They don't feel entitled and they're willing to work hard," he said. "They want to have an impact."