In response to my May 24 blog on the growing demand for young advisors (contrary to current conventional wisdom), “FavoriteSon” took exception, writing this comment: “Your assessment is upside down. What technology and new people lack is judgment and the seasoning of mistakes. Senior advisors, good ones, will always be valued over junior advisors.”
I don’t disagree: More experienced advisors will always be valued more highly than less experienced advisors. But in the economics of businesses, “value” is not the same thing as “need” or demand. For instance, in a manufacturing business, well-educated, experienced executives are typically “valued” more highly than production workers: that is, they get paid more. But the “demand” or “need” for workers is usually much higher, and consequently, there are a lot more workers than there are managers.
In small service businesses, such as independent advisory firms, this hasn’t historically been the case. In the old days, two or three advisors (or doctors, or lawyers) typically needed only an administrative assistant or maybe two to keep up with the paper work and answer the phones. Obviously, that’s not the case any more. Not only has the world become a lot more complex, but technology has greatly increased the ability of lesser trained, or lesser experienced, “workers” to leverage more experienced professionals so that they can serve more clients—generating more revenues at a lower cost.