With all the ink that has been spilled this week over the lack of jobs and the need for job creation strategies, it was easy to miss a very telling, compelling — and contrary — story about the potential for jobs in one corner of the business world: The financial advisory industry.
On our webcast yesterday, which offered a sneak peak at some of the key findings from the soon-to-be released 2011 InvestmentNews/Moss Adams Staffing & Compensation Study, senior research analyst Jeff Pierce pointed out a startling stat.
Nearly 40% of the firms that participated in this year's study indicated that they plan to hire recent graduates as part of their strategy to staff up, noted IN Adviser Solutions' Mr. Pierce.
By universally applying this number to the 28,000 state and SEC registered investment advisers in the U.S., Mr. Pierce estimates that if 40% of these firms hire one college graduate each year, the RIA industry would need between 11,000-12,000 new recruits
each year.
Put into some perspective, that would mean 1 out of every 125 college graduates
each year would have to go to work for an RIA firm in order to support their demand for new talent, and RIAs' plans for expansion, according to Mr. Pierce.
Talk about an eye-opener.
RIAs are relying on a pretty broad mix of recruiting sources to add these new hires, including undergraduate programs and internships, as well as MBA and
financial planning programs, according to the Staffing and Compensation study, which will be released at the end of September.
But it would seem that demand is certainly on the rise for new talent, which is notable considering the decrease in the overall population of advisers and brokers that has taken place over the last decade.
Fueled mostly by shrinkage among the wirehouses, the universe of advisers and brokers has slid nearly 5% since 2004, dropping from 338,000 to 320,000 at the end of last year, according to data recently compiled by Cerulli.
For an industry that has been said to offer one of the
best jobs for the next decade, the interest in new hires among RIAs may just be the beginning of a much larger trend — one that could take years to develop, but could also tip the balance of power in the retail brokerage and financial advisory industry.
For more information on the key findings of the 2011 InvestmentNews/Moss Adams Staffing & Compensation Study, click here.
To listen to the archive of yesterday's webcast on the key findings, please click here.
—Mark Bruno
