"People make it sound like they're on their last legs," Meyer said of aging advisors.

The question is growing ever more urgent: What to do with the growing number of aging advisors and the lacking number of the next generation successors?

James Kerr, president of D.A. Davidson Cos., provided what he called a “different perspective” on how to solve the increasing number of advisors nearing retirement.

“Probably because I’m getting to that age of 65,” he said during a breakout session focusing on the private client business at SIFMA’s annual meeting in New York on Monday.

Kerr’s suggestion — instead of solely focusing on recruiting younger generations — focuses on keeping advisors around longer.

“We have a lot of advisors in this range that, frankly, their life expectancy now — if they’ve made it to 65 — is somewhere around 83 to 84 years old,” Kerr said. “They’ve got a lot of life left in them, and I think it’s an opportunity to recruit those individuals to stay with us.”

Kerr, who on a recent Internet search was looking for the origins of the retirement age as 65, found some evidence that Germany had established a retirement age of 65 in 1880.

“Nobody was living that long, so it was financially very feasible,” Kerr said. “But here we are, what, 135 years later and we’re still talking about 65 and all of us have advisors that are this age. And, frankly, I think they talk themselves into the fact that they need to [retire].”

Joining Kerr on Monday’s SIFMA panel was Brand Meyer, senior managing director and head of Independent Brokerage Group for Wells Fargo Advisors.

“When we talk about the age of our financial advisors across the business — which is, give or take a couple years, probably 55 — people make it sound like they’re on their last legs,” Meyer said. “Which, quite honestly, isn’t the case.”

Kerr added that his firm has found success in teaming younger partners with older advisors.

“Teaming in our firm is a big deal now,” he said, adding “… and younger advisors teaming with older advisors seems like a great combination.”

Meyer agreed with this team approach.

“[F]or those people who start to develop teams and bring in younger people to pair up with them, they actually extend their longevity in the business,” Meyer said.

But Meyer also addressed the need to attract new advisors.

“I think one of the things we need to figure out as an industry is how to attract the next generation of advisors to want to have a career as advisors,” he said. “… It’s going to be much more difficult to attract very talented people because the whole notion of commission-based earnings is just not comfortable.”

Meyer also sees a negative connotation attached to “financial advisor” that may deter future advisors.

“I believe that there’s still an image that people need to be Type A, need to be able to be pitchmen, be able to be active salespeople — and that is not the business we are in today,” Meyer said. “We have evolved. What makes the most successful financial advisor is the person who takes the time to listen and understand what the client is trying to accomplish.”

Lisa Kidd Hunt, executive vice president of International Services and Special Development for Charles Schwab & Co., remembers a day when a career in the financial services industry was viewed as idyllic and she urged for the industry to return to that view.

“It’s a problem when you think where we’ve come in the last 30 years,” Hunt said during the panel discussion Monday. “Less than 7% of college graduates coming out today are looking to pursue a career in financial services.”

When Hunt came out of college in the ‘80s, she said the financial services industry was a “real destination.”

“Wall Street was a place you aspired to come and work,” she added. “It was a meaningful career building the economy in the U.S. and somehow over the last 10 years during the financial crisis, we’ve really lost our way there.”

It’s no longer a destination business, she said.

“Together as a group, we really need to work hard to rebuild the nobility of financial services,” Hunt said.

 

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