This is the third post in a three-part series on RIAs hiring advisors under the age of 40 who are looking to transition to independence.
As I’ve pointed out in my two previous articles, RIAs can realize significant benefits by hiring younger who are looking to go independent. What’s more, recruiting these advisors can be a relatively smooth process if you take the right steps.
Trouble is, too many RIAs fail to consider younger advisors and give them a chance—mistakenly believing that their relative inexperience makes them bad candidates.
With that in mind, here’s the truth behind five common myths about today’s crop of young financial advisors.
Myth #1: Young advisors are entitled and unwilling to work hard. Older advisors sometimes complain that younger advisors today lack a strong work ethic and commitment to their careers. But surely it’s short-sighted to paint an entire large group as entitled, and doing so could cause you to miss out on some great talent. In fact, I see plenty of younger workers (and even recent college grads) who are highly motivated to work hard and “put in the time” with firms that give them opportunities.
That said, today’s younger workers do tend to be motivated in different ways than previous generations of advisors. Gen-X and Gen-Y’ers want to see a purpose for the work they do and an importance behind it. Unlike previous generations that typically focused on getting a good-paying job right out of college, younger workers often want to know that their efforts will have a larger meaning and purpose. Keep that in mind if you choose to recruit these workers.
Myth #2: Young advisors don’t know how to sell. Nope. In fact, some of the most talented salespeople we employ at Schwab are young—under 35 years old. They understand that sales is about relating to people and conveying the information they need to make informed decisions. Whether you’re young or old, the degree to which you can relate to the people considering your services is what will differentiate you and make you successful. That ability has nothing to do with age. I have met a lot of young advisors who are great at this.
Myth #3: Older clients won’t work with younger advisors. There may be a kernel of truth to this myth. After all, we all like to associate with others who are like us and have similar life experiences. But ultimately, clients care most about working with people who can meet their needs, work in their best interests at every step and help them reach their most important goals. Younger advisors may have to work harder to prove to older investors that they can get the job done. But in the end, an advisor’s expertise at addressing key financial challenges—not an advisor’s age—drives a prospective client’s decision to work with that advisor or not. In addition, as I mentioned in my first post, advisors under 40 can be a huge ally in connecting with the younger members of a client’s family and helping to ensure that those heirs remain with your firm after they receive the patriarch’s or matriarch’s wealth. In making that connection with a client’s heirs, young advisors also demonstrate to the older client that they are highly capable of being involved with the entire family relationship.
Myth #4: Young advisors have technical knowledge, but no “people skills.” I see no correlation between technical skills and the ability to work well with other people. It may even be true that social media technologies like Facebook and Twitter—which are used heavily by younger generations and which let users interact with large and diverse groups of people around the world—actually strengthen one’s ability to relate to other people. What’s more, thanks to the growth of the wealth management business model that emphasizes relationships over sales pitches, younger advisors are extremely comfortable with the idea of working collaboratively with clients to help address their needs.
Myth #5: Young advisors haven’t been through complete market cycles, so they don’t see the longer-term picture. I believe that younger advisors’ experiences during the recent bear market and recession actually give them a unique perspective that puts them at an advantage in understanding markets and investing on behalf of clients. Due to the volatility and risk over the last few years, younger advisors are acutely aware of how much is at stake with their clients’ capital. They recognize that there is a larger economic cycle that impacts wealth creation and retention, and that markets can plummet as fast as they can soar. As a result, these advisors take nothing for granted when it comes to helping clients be good stewards of their wealth.
The upshot: Don’t let myths and half-truths blind you to the growing number of younger advisors transitioning to independence and all the benefits they can bring to an RIA. If you’re looking to hire, take the time to interview some younger candidates. You might find that they’re exactly what you need to help you take your firm to the next level.
For informational purposes only.
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