With thousands of Baby Boomer-era advisors poised to start retiring en masse, the wealth management industry is facing a serious succession-planning crisis of its own. According to the Harvard Business School, the financial services industry has experienced a serious decline in new entrants that ranges between 31% and 45%1 . J.D. Power’s 2019 U.S. Financial Advisor Satisfaction Study also revealed that the average age of financial advisors is about 55, with only 11% of advisors under the age of 402 .
Despite the critical need to attract young talent to the industry, many firms say they lack the resources to source, train, and place the new employees they need to grow their businesses. In fact, 73% of respondents to the 2018 Fidelity Talent and Diversity Study indicated they were not satisfied with their own hiring and onboarding process. Nearly 60% also indicated that finding talent that matches their needs is a serious challenge.
Small to mid-sized firms located outside major metropolitan areas often struggle to attract qualified college graduates to their profession, says Steve Clark, president of DAK Associates, an executive search firm based near Philadelphia. Clark believes that misperceptions of what it means to work on “Wall Street” are partially to blame.
“When students graduate college, they often have no idea how truly vast, complex, and multi-faceted the financial services space can be,” said Clark. “We don’t have a lack of interest problem with students wanting to join the financial services ranks. But we do have an education challenge to enlighten them around the tremendous opportunities and career paths that exist.”