The key to adding young advisors to firms is offering opportunities to work with people, a survey released March 6 by Schwab Advisor Services found. The No. 1 role students want in a financial services firm is relationship management.
Schwab conducted the survey among more than 100 students studying personal financial planning at Texas Tech. It found that only 27% of respondents said they would consider a product development and delivery role ideal.
“Our goal is to help people prepare to work at an RIA firm,” Nick Georgis, vice president of practice management and strategic business development for Schwab, told AdvisorOne on Friday. “The survey found what they’re looking for makes them a great fit for an independent advisory firm.”
Considering those aspirations, it’s not surprising that students prioritize what Schwab calls “soft skills”: communication, problem solving and self-motivation. Almost all respondents said being able to communicate and build relationships with all types of people was a very important skill in the financial services industry, followed closely by being able to identify and understand challenges and provide a solution. Almost 70% said self-motivation was an important skill.
Students are putting those values into action. The study found 70% of students said relationship building was one of their key strengths. Sixty-eight percent said their problem solving skills were their strongest ability.
However, some students may need to focus on their understanding of financial markets and investment strategies. More than two-thirds of respondents said that understanding was “very important,” but just 40% said their abilities in that area were strong. Nearly 60% said they had only “some ability” in understanding financial markets and investment strategies.
“Most advisors will say focusing daily on the markets generally is not a good thing,” Georgis said. “I see this as a positive sign that [students] understand it’s not just a technical expertise. They fully embrace the need to relate to their clients throughout their lives.”
The Schwab survey found that young people’s reliance on online communications in general may be overstated. When asked to rank how they build their personal networks, almost twice as many ranked offline networks as their No. 1 networking activity as those who primarily use online networks.
While nearly a quarter of students said they were actively working to expand their network, less than 14% said they try to offer something of value in return.
Georgis noted that’s likely due to students’ inexperience. “Students are still in that mode where they’re learning how to add value,” he said. For the students who attend Schwab’s Impact conference to network with working advisors, “when they come to Impact, the conversations are about what they need to do to stand out.”
Georgis pointed to the firm’s Schwab Advisor University, which launched in June 2010 and has since been used by more than 4,000 young advisors. “Schwab University was designed for new employees at advisor firms,” Georgis said. “There are 65 courses that teach the things clients will need to have happen.”
Students are not just looking for careers where they can build connections with clients; they also want balance. More than a third rated work-life balance as the most important factor in a happy career, and 64% said it was in their top three priorities. Almost the same percent said helping others achieve their goals was in their top three criteria. And they’re not just in it for the money. While financial reward was in the top three criteria for nearly half of respondents, just 5% said it was their No. 1 criteria for a fulfilling career.