The vast majority of young financial advisors report being at least somewhat satisfied with their career choice, according to a new survey from LIMRA.
For Gen X and Gen Y advisors under the age of 40 and with less than eight years in the industry, 44 percent report being very satisfied with their work. For those with more than 8 years of experience, 60 percent reported being very satisfied.
When accounting for the “somewhat” satisfied, the figure jumps to about 90 percent for advisors above and below the eight-year threshold.
That level of satisfaction suggests income and workplace flexibility are at least being closely matched with the expectations advisors held when they decided to join the industry.
Six in 10 young advisors said they chose their career path to make a difference in people’s lives. For Gen X advisors, those altruistic instincts had even more sway in their decision than earning potential, as “making a difference” in people’s lives was the top reason for becoming an advisor.
Along with the independence that recruiters often tout as a key fringe benefit to the advisory industry, younger advisors also put a high value on collaborative and mentoring relationships with more seasoned advisors.
Three quarters of advisors under the age of 40 said they had a mentor relationship, most of which developed informally, as only 18 percent said they were part of a formal mentoring program.
That’s a trend worth noting in a graying industry. Research from Boston-based Cerulli Associates last year showed 43 percent of all advisors last year are over age 55, with the average age of the entire industry being 51. About one-third of advisors are between the ages of 55 and 64.
Most of those advisors are moving toward retirement without a succession plan. Data varies, but one survey of 117 independent financial advisors by CLS Investments showed only 18 percent have a defined succession plan.
The same study suggested advisors are counting on the sale of their business to fund their own retirements: 40 percent said they expect the proceeds to generate 26 to 50 percent of what they will need; 14 percent said they expect the proceeds to generate up to all of their retirement income.
LIMRA’s Young Advisor Snapshot is the first in a series of reports examining the perspective of younger advisors, as the financial services industry faces the challenge of recruiting and retaining new advisors to replace an aging sales force.