“The times they are a'changing.” So said Bob Dylan in 1964. I am fairly certain he wasn't talking about the financial services industry, but now, 50 years later, his message most definitely applies to our world.
We are caught in a whirlwind of debate and discussion about the Millennials and how they will affect our firms, both as clients and employees. Hardly a day passes without a new study showing that the baby boomer population is falling off the cliff, which will leave us with a massive void of experienced financial advisers, and a collection of young (younger is probably a more appropriate word) clients who will have a set of expectations that we aren't yet prepared for. An intimidating story to be sure.
Will this scenario actually play out? My belief is that it is highly unlikely. There is no doubt that we have some challenges to overcome, but the very fact that there is a tidal wave of research and discussion occurring seems to indicate that we are aware and working toward solutions.
I am in my early 40s, so I'm not sure exactly what qualifies as young anymore, but in talking with experienced (and no, that doesn't mean old) advisers at our firm, I get a sense that there isn't a mad rush for the door. Through our firm's practice management programs, I have had the opportunity to work with arguably some of the best advisers in the industry, and I see passion, energy and a commitment to clients that I would love to replicate in our new hires. And when I talk to many of the Millennials who have joined us, those traits are clearly evident.
So why the concern? There are two key challenges that exist — what I like to call the who and the how. The who is our industry's ability to identify and attract talent. Current assessment, hiring and compensation procedures need to be revisited with an eye toward the future business model. Without that step, we may end up losing great talent to a failing approach … or may never attract it in the first place. To me, this is more about quality than quantity, although both are relevant.
The second opportunity, the how, lies in what we as an industry do to prepare advisers for long-term success. Development needs to go beyond licensing and formal classroom training. We need to build ongoing platforms for continual, lifelong improvement. This includes concepts like apprenticeship, mentorship, teaming, and experiential learning. Without these components we'll continue to struggle to keep good talent over the long haul.
The ultimate “win” will be the alignment of these two approaches to the needs of our clients — both of today and tomorrow.
As a hockey buff, I am reminded of a line delivered by coach Herb Brooks right before the 1980 U.S men's hockey team went out and did the unthinkable and beat the Soviet Union in Lake Placid. (For Millennials reading this, this was before your time!)
“Great moments are born from great opportunities”
I believe that is exactly what we face today — a great opportunity. Over the coming weeks, I'll be digging deeper into that opportunity to reframe the role of the financial adviser and make it more attractive to our “advisers-to-be.” I'll also discuss how the next generation will need to fight through the preconceptions we hold of them as a group, and show us that characteristics like patience, perseverance and work ethic are in their DNA.
Can we find those who are willing to evaluate the changing landscape and set themselves apart by making a difference in the lives of clients, their families, their communities and their firms? I say yes.
Devin DeStefano is managing director of Next Generation adviser strategy with Wells Fargo Advisors. He can be reached at 1 N. Jefferson Ave. St. Louis, MO 63103