How firms can win the next generation of talent

If wealth management firms want to win the battle for the next generation of talent, they must drastically rethink long-held expectations about how, where and why people go to work.

A quarter of people love working remotely and never want to go back to the office, while another 25% miss the office and want to return full time, said Andrew Schwedel, a partner with management consulting firm Bain & Co. The other 50% of people want some form of hybrid work, and managing for this so-called “25-50-25” split will be one of the biggest challenges facing employers in the coming years.

“There have been a lot of good things that have come out of remote work,” said Schwedel, who shared his company’s latest research at InvestmentNews’ 40 Under 40 Awards ceremony in New York City. “We’ve also sacrificed a lot in terms of apprenticeship and developing the next-generation talent. And the jury is still out on productivity.”

More than half of workers globally are reconsidering their work-life balance as a result of the Covid-19 pandemic, and 62% of those under 35 are feeling overstressed, Schwedel said. Women are feeling even more stressed than men.

Companies are trying some radical experiments to respond to this, such as online retailer Zappos' elimination of management structures, but Schwedel says even more is required. Many firms still focus more on recruiting outside talent than developing current employees and encouraging them to learn new skills. Ongoing automation is only going to accelerate how quickly roles can change.

“The half-life of skills is going down rapidly,” Schwedel said. “Learning how to learn, learning how to take on new skills becomes a really critical thing we need to master.”

Rather than forcing people into certain roles, Schwedel encouraged firms to think about six different archetypes of workers and how each can fit into building teams. In addition to striking a balance between reskilling and recruiting, the future of recruiting will require firms to find and tap into hidden talent pools, he said.

Some of that talent can be found in building connections with first-generation students and campus groups of traditionally underrepresented demographics in financial services, Anand Sekhar, vice president of practice management and consulting at Fidelity Investments, said at the 40 Under 40 Awards. Firms can also look at what Sekhar called “switchers” — professions like nurses, teachers and social workers that tend to be experience burnout and could be open to a new career — or transitioning military veterans. There are also baby boomers who left workforce during the pandemic and are looking to return.

To develop talent already employed by the firm, Sekhar advocated for an apprenticeship model used by many medical practices. Rather than hire a recent business school graduate and make them immediately bring in clients and assets — the old “eat what you kill” model — advisory firms can think about bringing in young talent to start as an assistant and gradually work their way up through different roles.

“Understand the need for new talent, understand the evolving needs of potential employees, attract talent creatively and rethink talent development,” Sekhar said.

Emlen Miles-Mattingly, co-founder of the Onyx Advisor Network, also shared the story of his network for underrepresented financial advisers and its progress since launching in April. Many of the advisers that have joined Onyx weren’t just barely making it, they were top performers of their firms. This shows a need for the industry to reform how it recognizes, evaluates and promotes talent, Miles-Mattingly said.

"Companies don't die from starvation, they die from indigestion," he said.

InvestmentNews' ninth annual 40 Under 40 awards honored the achievements of young professionals working in wealth management. The class of 2022 was selected by a team of reporters and editors from nearly 1,000 online nominations.

[Read more: The persistence of remote work]