Youth is sweet.
Youth is sweet. For the advisory business, it's also a challenge. While many advisory firms are considering new ways to recruit, retain and reward the younger members of their staffs, managers must go further. They should make an extra effort to identify the young people in their organizations who will become the stars of the future.
I'll be the first to admit that star identification and personnel development aren't easy. But without a serious attempt at it, the advisory business will wither.
Young professionals in the financial advisory business are frustrated. At conferences and meetings, I have talked to young people who say their bosses are not giving them enough opportunities to excel.
Some have told me that managers don't want them working with clients because they lack experience (which, of course, brings up the question of how anyone can get experience if not given a chance to do anything).
To be sure, impatience is typical of youth, and what 25-year-old doesn't think he or she is just as knowledgeable and capable as the 45-year-old dinosaur sitting next to him?
But demographics are changing the American work force in ways that will require the managers of financial advisory firms to approach their younger and older workers in new ways.
For that reason, advisory firm owners should take a deep breath and approach their NextGen employees not as minor leaguers who are years away from the majors but as junior partners on a clear track to management and leadership positions.
Firm leaders also must consider non-traditional ways of dealing with older workers.
This shift in mind-set and management direction entails new approaches, not just to recruiting but also to retention, promotion and succession strategies.
Those firms that adopt forward-thinking practices will put themselves in a great position to attract and retain skilled, younger workers as well as aging baby boomers.
Here's why that's so important:
In simple terms, the number of baby boomers is far greater than the number of potential employees in Generation X and Generation Y who are available to serve or replace them as they age. This poses challenges to all three generations.
NOT READY TO RETIRE
Adding another wrinkle to the demographic imbalance is the fact that the baby boomers are unlikely to be leaving the work force en masse.
For years, forecasters assumed that boomers would retire at 65 or earlier, just as their parents did. But the economic downturn and decimation of retirement accounts have slowed the rush to early retirement.
A study by AARP showed that many older employees not only want to keep working but actually need to stay in the active work force because their paychecks are their only reliable and adequate sources of income.
At the very least, they will seek part-time work as they ease into retirement.
Older workers who want to continue working, but on a lighter schedule, and younger workers itching for more responsibility would seem to be a dynamic tailor-made for advisory-firm proprietors. But let's not overlook the thorns in this rosy picture.
The three generations in question often rub each other the wrong way.
If Gen Xers can't wait to push aside the baby boomers (whom they often view as self-absorbed), neither they nor the boomers hold the Gen Yers in high esteem.
Generation Y is seen as smart, brash and willing to work, but not willing to make work their whole life. Since they grew up questioning their parents, they now question their employers.
Does managing an intergenerational work force sound scary? It may be, but what other choice is there?
For the sake of the future, advisory-firm leaders must find ways to create career opportunities and increase awareness in the labor market of the potential rewards of the financial advice business.
If the business doesn't create and nurture its own seed, there will be no new crop of financial advisers and advisory-firm leaders.
Jim Pavia is the editor of InvestmentNews.
