“Advisory firms are going to have to rethink their hiring philosophies to meet the growing demand for investment advice,” according to industry representatives and academics.
Deena Katz, an associate professor of financial planning at Texas Tech University, argued that advisors can no longer expect to hire only seasoned, mid-career professionals with an established book of business.
"The model’s broken," Katz said during a panel discussion at the Financial Services Institute’s OneVoice conference. "Hiring people to start producing when you bring them on from day one isn’t going to happen anymore."
25% of Financial Advisors Are Planning to Retire in the Next Decade
Much of the next-gen challenge involves demographics. Citing various industry reports, Pershing Director Kim Dellarocca offered the alarming projection that 25% of advisors are planning to retire in the next decade, meaning that the industry will need some 237,000 new entrants to replenish their ranks.
As an academic discipline, the financial advisor program is growing, and the CFP Board is working actively to help develop and certify new programs that will have a hand in producing the next generation of financial advisors — if firms are willing to hire younger.
The panelists urged advisory firms to ramp up their presence on the campuses of local colleges. Those partnerships can take many forms, such as offering internship programs or dispatching advisors to visit campus businesses clubs, delivering guest lectures or teaching adjunct classes.