According to a 2019 study by J.D. Power, the average age of financial advisors is 55, with 20% of financial advisors aged 65 or older.¹

The financial advice industry is in desperate need of a new crop of advisors. It matters to all Americans, especially younger Americans, who will need experienced financial professionals to help them attain their financial goals.

It also matters to the retiring generation of financial professionals for a couple of important reasons: 1) to ensure their clients continue to be treated with the skill and care they have received over the years, and 2) to have a pool of potential buyers in order to monetize their business upon retirement.

While technology—such as robo-advisors—may fill some of the gap, the financial advice industry will likely remain very human-centric, especially for wealthy individuals with large assets to manage and more complex financial planning challenges.

Developing the Next Generation of Advisors

Today’s financial professionals are well positioned to contribute significantly to developing a new generation of financial advisors through educational support, mentoring and hiring.

The first big challenge is identifying the sources of the next generation of financial advisors. One source is America’s colleges. There are a number of colleges around the nation with highly regarded financial planning programs that prepare young Americans to be tomorrow’s financial advisors. (See our article on Recruiting Gen Z Advisors.)

Future financial professionals can also be found in the ranks of experienced workers looking for a career change or to re-enter the workforce. These workers may be teachers, real estate agents, accountants, lawyers, etc. Each brings a unique skill set that positions them well to succeed as a financial advisor.

Here are some things you can do to foster a new generation of financial professionals.

• Provide internships to college students studying financial planning or pursuing related financial degrees. Hands-on experience is a perfect way for young men and women to appreciate the value and excitement of helping individuals achieve financial success.
• Reach out to career planning organizations to share what it’s like to be a financial advisor and the professional opportunities the career presents. Working specifically with organizations focused on providing guidance and assistance with “second careers” will give you an ideal networking opportunity to find talented people with real-world experience.
• Connect with outfits that help women re-enter the workforce, such as Path Forward, Ellevate, The Second Shift and iRelauch. You may find talented, motivated women from a variety of professions that can become productive financial professionals.
• Once onboard, be sure to provide the training and mentoring that allows them to thrive so that your investment in time and money are appropriately rewarded.

New generations have different experiences and skills, and challenge the existing models by which an industry operates.  All organizations need the fresh perspectives of the next generation, and financial services is no different.  Supporting younger workers with a career as a financial professional benefits the industry, your business and that of future advisors.

Source:

1. https://www.benefitspro.com/2021/06/30/as-financial-advisor-workforce-ages-what-will-it-mean-for-retirement-plans/?slreturn=20230904112701

Please reference disclosures at: https://blog.americanportfolios.com/disclosures/