The growing talent shortage in the wealth management business means that more advisors will need to add members of Gen Z to maintain and grow their practices.
Meanwhile, the evolving employment crisis shows that jobs for new and recent college graduates are becoming harder to find.
So bringing these two groups together shouldn’t be too difficult? Right?
To quickly review, over one-third of advisors, representing 41% of industry assets, are expected to retire within the next decade, according to a recent Cerulli study. To make up for all the wealth management talent headed for the beach or the mountains, the RIA industry will need to add over 70,000 new staff over the next five years based on current growth rates, according to the latest Schwab study.
At the same time, the unemployment rate for “new entrants,” a group that includes recent college grads and others seeking to break in to the full-time workforce, hit a nine-year peak this year, according to federal data. The group’s share of the total unemployed population surged to its highest percentage in decades.
The fact that Gen Z was born roughly between 1997 and 2012 means they grew up with the internet, smartphones, and social media. And when it comes to attracting and hiring Gen Z talent, Patrick Swift, partner & president of Wealth Planning, Amplius Wealth, said staying current on social media, especially LinkedIn, is a big advantage in staying on top of the talent pool in their geographical area.
“We’ve been lucky so far in attracting Gen Z talent. Most of our hires have been from personal connections we already had in the industry. Moreover, I think our Gen Z hires have been satisfied with their decision to join Amplius because we try to cultivate a fun, casual, and collaborative culture where everyone has a voice and is working together towards one goal,” Swift said.
Elsewhere, Brandon Ross, co-CEO at Quotient Wealth Partners, said he has three primary methods of attracting Gen Zers for employment: internships, college recruiting and organic social networking.
“Our strategy is to show a clear path of career advancement and training that will allow them to be a successful next gen advisor,” Ross said.
Similarly, Carson Demberger, assistant vice President, Sales Operations at Dynasty Financial Partners, agrees that recruiting Gen Z members into any industry starts with showcasing real opportunities for growth and ownership. In her view, wealth management naturally stands out for Gen Z members with drive because it empowers individuals to build something of their own. Nevertheless, she feels the industry has not sufficiently trumpeted this attractive message of independence.
“Gen Z is the most entrepreneurial and outspoken generation yet, and this industry is uniquely positioned to support their drive to lead, learn, and build with purpose. It just needs to be more widely spread that the Wealth Management industry is undergoing massive change - and it welcomes different opinions. Not to mention the generational wealth movement is getting younger and younger - and more female,” Demberger said.
ATTRACTING A NEW AND DIFFERENT GENERATION
As to what makes Gen Z different from other generations, as well as what attributes they bring to the workplace, Amplius’ swift said its members tend to have an adept understanding of technology, a casual demeanor and a team-oriented mindset.
“I think they differ from previous generations in the ways they think about their career aspirations, but that may be too reductive to say that about the entire generation,” Swift said.
Quotient’s Ross characterizes Gen Z as having a “different attitude towards work ethic.” And it’s a welcome and refreshing one in his view.
“They are concerned more about making a difference in the firm and are willing to make personal sacrifices to prove themselves,” Ross said.
Anna Schrank, assistant vice president of sales marketing at Dynasty Financial Partners, points out that Gen Z spends a great deal of time on TikTok, Instagram, and LinkedIn, so wealth managers seeking to bring in the best and brightest need to meet them where – and how - they live.
“Firms should create content that is authentic, engaging, and educational. Short videos that show real career paths, team culture, and the impact of the work can go a long way in building interest,” Schrank said.
Furthermore, Schrank believes that traditional financial goals like buying a home or a car feel increasingly out of reach for many Gen Z members due to inflation and stagnant wages. As a result, she said firms should position wealth management as a way for Gen Zers to help others navigate these challenges while also offering a path to their own financial empowerment.
“Job loyalty is less of a priority for Gen Z. If a firm cannot offer competitive compensation or meaningful career development, young professionals are likely to move on. Investing in talent through fair pay and growth opportunities helps avoid costly turnover,” Schrank said.
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