It’s not that Gen Yers don’t care; they just don’t know about the career opportunities the financial services industry can provide.
A report released Thursday by Fidelity Investments surveyed millennial college students and young professionals, as well as career influencers and hiring managers, to get an idea of why young people aren’t entering the advisory profession.
The problem is not that they aren’t interested in becoming advisors; it’s that they aren’t familiar with what being an advisor means. Just 20% of students and young professionals said they were familiar with the profession. However, once they learned more about it, according to Fidelity, almost half said they would consider it as a career.
The “Recruiting Redefined” survey identified three ways advisors and the industry in general could bring awareness to younger people to attract them to the industry.
First, firms need to look outside traditional sources for new talent.
“What we found is that advisors need to change the way they’re recruiting and the way they’re looking at the space. They need to make a commitment to better address the talent pool,” Jylanne Dunne, senior vice president of practice management, Fidelity Institutional Wealth Services, told ThinkAdvisor on Wednesday.
Dunne said one place to start looking would be in their own internal networks. ”One of the things that we saw in the research is that 95% of advisors are hiring,” she said. “They really need to get the word out that they are hiring and focus on communicating those jobs in a different way to create excitement.”
Another potential source for new talent is in adjacent fields of study. In fact, hiring managers who responded to Fidelity’s study said that “second-career, third-job” candidates were “very effective,” Dunne said. “Seventy-five percent of hiring managers said those with an established career prior to coming to the advisory space outperformed those who did not.”
(According to a recent Schwab study, nearly two-thirds of independent advisors said they were in their second or third career.)
Depending on their field of study, some candidates may be able to earn certifications like the certified financial planner designation more quickly. For example, candidates who were certified public accountants can take an “accelerated shortcut” with one class to prepare for the CFP exam, Kevin Keller, CEO of the CFP Board, told ThinkAdvisor.
“Advisory firms and others who are in the position to recommend CFP certification tell us that completing the CFP education and exam program gives advisors confidence and competence,” he said.
The industry at large suffers from a perception problem. Outsiders frequently view career opportunities in financial services as sales positions. Among the top reasons Gen Y respondents gave for why they would not become an advisor was that there was too much pressure to sell products. Working on commission was also unappealing.
Unfortunately, hiring managers said sales ability was one of the top attributes they were looking for in potential candidates.
Students fear the “Wolf of Wall Street” concept, Dunne said, and worry that they’ll spend all their time “dialing for dollars and trying to develop business.” The study found millennials are looking for job stability and career advancement with work-life balance. They also want an opportunity to give back.
“If you match that with what current advisors say they like about their job today, and I think the number is 83% of current young advisors say they really love their jobs, the things they like are those four things,” Dunne said. “Advisors can take those attributes, build them into their job postings and conversations with this next generation in order to create more interest and engagement.
“By changing the way that advisors talk about the profession, talk about their job description will very easily translate into more interest in those positions,” she continued.
Finally, firms need to examine the way they approach networking and referrals with potential candidates. Among the young advisors surveyed, 80% said the job was more positive than they had expected. They described their job as intellectually gratifying and one that provided opportunities to help people.
Fidelity found college professors and career counselors were among the top influencers for job advice (friends and family are first), but only 32% of firms are working with career counseling offices to engage students.
Additionally, only three out of 10 new hires come from referral networks. Fidelity suggested firms utilize social networks and alumni directories, which are used more frequently by Gen Y job searchers than other referral networks.
Fidelity and the CFP Board are working together on an online career center, the CFP Board announced Thursday.
“Among the CFP professional population — we’re at 70,300 now in the United States — we have more CFP professionals over the age of 70 than under the age of 30,” Keller said. “That’s why we decided to develop the online career center; to be a destination where we can connect job seekers and employers and have more than just a search functionality, but make it a content-rich site with information about the careers in financial planning and other data that supports job satisfaction.”
The career center will go live in the first quarter of 2015 on the CFP Board website.
Fidelity is the exclusive founding sponsor of the career center, and will provide funding for development of the site, as well as CFP Board’s scholarship programs and other resources.
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