Needed: Young Talent

Ceruilli also notes that it’s almost impossible for young graduates entering the planning field to build a book of business these days like their elders did, thus they are attracted to the team-based approach. In more recent years, new entrants have been seeking positions in registered investment advisory firms, not wirehouses, Cerulli notes, because they dislike sales. RIA firms, Cerulli says, “increased their share of new entrants from 2% in the 1990s to 10% in the new millennium.” Increasingly, B/D firms that are willing to take on new graduates in a team-based practice are the independent firms.

Because competition for young graduates is fierce, Cerulli suggests that B/D firms that are serious about recruiting these young folks should offer an internship program and bring in students in their junior year as most of the top-tier students have already been nabbed by their senior year. The typical new recruit is earning a starting salary from $50,000 to $60,000. “With their pick of firms, most of these graduates tend to choose boutique RIA firms or join existing teams at B/D firms that are willing to offer a defined career path and demonstrate a commitment to graduates,” Cerulli says.

Firms that do hire young talent find that “with qualified staff on board, it’s much easier for them to grow,” Cerulli says. Cerulli points to one large RIA firm which said that it’s increasing market share “at the expense of wirehouse firms due, in part, to its cherry-picking the best new talent form financial planning programs.”