The ground is shifting beneath our feet. The problem is, we look down to see the ground cracking while remaining completely oblivious to what's overhead: A new atmosphere. A changed environment. An unrecognizable future.
The financial services industry today looks nothing like it did just five years ago. For one thing, it's older. Some studies estimate that by 2022, the U.S. wealth management industry is likely to face a shortfall of at least 200,000 employees. Much of this reflects the aging population of advisers.
Meanwhile, consumers are more comfortable than ever with artificial intelligence when it comes to investing. They're more educated, more aware of what's in their best interest and more capricious with their loyalty if they don't see their adviser proving immediate value. Consolidation is picking up momentum in a space that was once stale. And advisers continue to feel fee compression while the cost of running a business continues to rise.
But there's something else afoot — a factor that one could argue has as much influence over the future as all these shifts combined: the next generation of our workforce.
The Bureau of Labor Statistics says the number of jobs in our profession will increase 15% over the next eight years. Meanwhile, a recent TD Ameritrade study shows 22% of advisers say the biggest threat to their business growth is a shortage of young advisers to hire. However, according to that same study, 44% of RIAs are doing nothing to build their talent pipeline. That's a quiet killer, considering that currently only 5% of advisers are under 30, according to Cerulli.
Onboarding the next generation can be daunting but of all the factors affecting the future, it's perhaps the one over which we have the most control. Public perception may continue to suggest millennials are narcissistic, entitled, flighty, impatient and overly idealistic. However, I've found most are being overshadowed and underutilized by their more seasoned counterparts.
4 Ways to Attract Next-Gen Talent
Young people don't want jobs. They want careers. They want fulfillment — to serve a bigger purpose than themselves. Unfortunately, our profession has done an excruciatingly exceptional job of conveying to them and their parents (via news headlines) that we aren't the most trustworthy or utilitarian.
We're also not exactly the gold standard when it comes to businesses whose leaders are skilled in people management. Most of us entered the profession because we loved the work, not necessarily managing a team. So as you develop your human capital, here are four ways to become a magnet for next-gen talent:
1. Give your sizzle some exposure. Financial services isn't known as the most vibrant career path for young people, but there are countless benefits most millennials or Gen Xers don't know exist. Work with a local university to mine talent, educate students on various areas of wealth management and uncover driven individuals. Inspire students about where opportunity lies through unique internship programs, shadowing opportunities or classroom appearances.
2. Guide with a growth path. According to a Deloitte study, only 16% of millennials see themselves with their current employers a decade from now. At Carson Wealth, we equip young stakeholders with an Advisor Growth Path, laying out various roles and compensation they can grow into as they gain more experience. Next-gen talent has the right to know where you see the firm going and how they fit into that vision. By setting up a growth plan, they can see the different areas they'll participate in and where they can challenge themselves, all while staying with you. Invest in them and they'll do the same for you.
3. Encourage discretionary effort. Give new hires real projects. Feed their hunger to learn and increase their responsibilities as they go. Our firm recently hosted our first RISE Innovation series, asking stakeholders for ideas on how to improve the company. We received 53 submissions, an incredible response, simply because we asked. Deloitte found that only 28% of millennials feel their current organization is making "full use" of the skills they have to offer. Meet with them individually and align duties with their passions and skill sets. To see what someone is fully capable of, you must first create the healthy environment.
4. Get flexible and accessible. Work/life balance may be a total cliché, but however you want to define it, create a flexible workspace in which everyone is accessible and capable, no matter where they are. Gone are the days when all your work must be done while sitting in front of your keyboard in your office.
Advisers, it's time we stop scoffing at the next generation and embrace the reality that our firms need the infusion of young talent and new ideas. The trick is in the trade. They're not just an eventual succession plan. They're your firm's biggest competitive advantage — now and in the future.