The Talent War: A First Person Report From The Front Lines

Charles Paikert US Correspondent New York March 4, 2024

The Talent War: A First Person Report From The Front Lines

Our US correspondent writes about the efforts by wealth managers to find and keep talent to ensure that they’re ready to handle multi-trillion dollar financial and business transfers, and guide future wealth creators.

I’ve written plenty of stories about the financial advisory industry’s very serious talent gap problem over the years. Read the alarming statistics about demographic imbalance at wealth management firms, the succession planning crisis, and the paucity of NextGen advisors.

“Talent is the top strategic priority for RIAs,” according to the most recent Charles Schwab Benchmarking Study. Over one-third of financial advisors are expected to retire within the next 10 years, and the average advisory firm now has three open positions. 

Data and studies are one thing, but going to the source and hearing what young people themselves think about the profession is quite another.

While covering the T3 conference in Las Vegas in January, I met Thomas Korankye, a certified financial planner, and an assistant professor of Personal and Family Financial Planning at the University of Arizona. As it happened, I was going to be in Tucson a few weeks later and Thomas invited me to attend a class while I was in town.  

Candid views
The classroom was next to an office labeled “Family and Consumer Sciences.” That day’s lesson, which was taught by program chair Andrew Waldum, was part of a risk management curriculum and focused on planning considerations related to disability coverage. There were 11 students in the class that day, nine men and two women.

I spoke with several students after the class, curious about how they and their peers viewed the profession.

Sean Turk, a senior majoring in Personal and Family Financial Planning (PFFP), liked the fact that he could benefit personally from knowing more about financial planning and could help other people at the same time.

But as a result of “low financial literacy,” most of his peers simply weren’t familiar with financial planning as a concept or profession, Turk said. 

Lauren Cruise, a junior accounting major, agreed. She didn’t realize financial planning could be a career until she began to take PFFP classes. “No one knows about it,” she said.

Students confuse financial planning with investing, added Forest Starr, a senior PFFP major. “They don’t realize the industry is transitioning,” Starr explained.

Missing presence
The industry must become more engaged on campuses and get the word out to young people in general, the students said.

In contrast to accounting firms, RIAs were missing in action at big career fairs on campus and weren’t offering paid internships, according to Cruise. “That’s not going to attract students,” she said. “[Advisory firms] have to take that extra step.”

Another problem is that the Certified Financial Planner certification suffers by comparison with the Certified Public Accountant designation, both Cruise and Turk asserted. “They’re not on the same level,” Cruise said. “The CFP is not as prestigious,” Turk added.

The wealth management industry can “incentivize students” by offering scholarships to financial planning majors, Starr suggested. And financial planning programs need to be publicized more: “Most students have no idea that there’s a PFFP program on campus,” Starr said.

Spread the word!
Korankye and Waldum also emphasized the need for more awareness.

“As young people are made aware of financial planning, they are interested,” said Waldum, an associate professor who is also a certified financial planner. “But there isn’t name brand recognition now. The challenge is to show them this is something they can do and that there are a whole host of opportunities available.”

An industry-led marketing campaign along the lines of ‘Got Milk?’ would be helpful, as well as local outreach programs to high schools, Waldum said. Thomas urged the industry to give out more scholarships, internships, and free subscriptions to planning-based software products such as MoneyGuide Pro, RightCapital and Income Lab.

For its part, the PFFP program has invited local and regional advisory firms to a jobs and internship fair where they also sit down at round tables to talk to students about the profession.

Mind the gap
To be sure, more young people are entering the profession as college and degree programs proliferate. Now just six years old, the University of Arizona’s PFFP Bachelor of Science degree program is expanding as part of its Norton School of Human Ecology. It now has five full-time faculty members, 67 students majoring in the degree and 30 declaring it as a minor.

But the need for NextGen advisors remains acute and my visit to the classroom underscores the gap the industry needs to fill.

Smaller advisory firms are particularly vulnerable, Korankye said. “It might mean extra work, but you need to make opportunities for young people to come in. That’s your succession plan.”

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