Mark Tibergien says there’s a fairly straightforward way for financial advisors to both improve their business and that of the broader industry, while getting more Americans to improve their financial health: Boost financial literacy.
The CEO of Pershing Advisor Solutions made his case during the company’s INSITE gathering in Hollywood, Fla., in June. “I want to appeal to you about something that can transform” our society, said Tibergien, “since we know that financial illiteracy is rampant.”
The advisor guru explained that today’s young adults do not get exposure to basic financial issues in high school and are simply “not prepared to deal with credit cards, banking, etc.” Many individuals today “are in dire straits, once again,” Tibergien explained, “and at its core are many of the factors that contributed to financial meltdown in ’08,” such as large levels of debt and the use of risky financial products.
At the same time, he notes, the level of trust in banks and financial institutions is very low, and the industry is unable to attract the talent it needs to thrive. That raises the question, he says, “Is there a correlation between the level of financial literacy, the reputation of the industry and its lack of appeal to those looking at this work?”
As today’s advisors retire, the field will need about 230,000 replacements. Tibergien argued that boosting financial literacy would improve the industry’s overall image and its recruiting appeal.
Positive Outlook
Despite these challenges, many advisors say they are enjoying greater success today than ever. In Pershing’s second-annual survey, released at INSITE, 38% of advisors said their business was doing “better than ever,” up from 31% a year ago.