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Financial Planning > College Planning

Big Firms Boosting Series 7 Courses at Colleges to Address Looming Headcount Crisis

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It’s estimated that more than one-third of U.S. financial advisors plan to retire over the next decade, while the number of advisors entering the business is much smaller.

Several firms are working to find an answer to this impending problem by working with a financial services training company to sponsor training courses for the Financial Industry Regulatory Authority’s Series 7 exam at various universities across the country.

Edward Jones, Allstate, Scottrade, Wells Fargo and Charles Schwab have partnered with Securities Training Corp. to bring a Series 7 course to 23 universities nationwide. In total, 30 universities are using STC’s Series 7 course material.

“There is a talent crisis that is booming, as it relates to our industry,” Angela Ruffin-Stacker, who is responsible for Wells Fargo Advisors’ FA diversity and inclusion strategy, told ThinkAdvisor. “Most of the research shows that for every eight advisors that retire, there are only about three who have the training (to replace them).”

According to a report from Cerulli Associates, more than one-third of U.S. financial advisors plan to retire over the next decade, and the industry will need to add more than 200,000 new professionals in order to keep up with demand. However, Cerulli finds that the number of advisors decreased by 12.7% between 2005 and 2013.

Cerulli has suggested that the industry would need to “lay a solid foundation to recruit and groom new talent in order to dampen post-2020 headcount declines.”

Matt Doran, the Edward Jones principal responsible for the firm’s Financial Advisor Career Development Program, also points out that the need for financial services is outpacing the growth of financial advisors.

“We aren’t bringing in enough as an industry even to replace those who are expected to leave, let alone address the growing need for what we do,” he said.

Making things more difficult is the lack of awareness among the younger generation.

A 2014 study by Fidelity found that only 15% of college students are familiar with the financial advisor profession, and 45% are not aware of companies that employ financial advisors.

Doran also acknowledges the need to raise awareness to younger generations about financial advice as a career.

“I do think that among younger candidates there’s a lack of awareness,” he said. “There’s plenty of awareness of the financial industry but it’s often maligned. But there’s not a lot of awareness of what a financial advisor actually does. When you’re part of an industry that’s often maligned and there’s also a lack of awareness of the value it provides or the activities it provides, it leads to people not opting for that career path because they just don’t know enough.”

This lack of awareness is exactly why David Snyder, executive vice president at Securities Training Corp., created the Series 7 course for college students.

“The vision was, how do we make more students aware of our industry? I’ve seen reports from as low as 7%.”

With that as a premise, Snyder started looking at how STC, which has provided study materials to help candidates pass regulatory exams since 1969, could offer a program on campus for three credit hours that would encompass a lot of what’s covered on the Series 7 exam.

All materials and training for faculty are provided by STC, with the cost of the materials and implementation (a $5,000 fee) covered by participating firms or the universities themselves. What started at two universities in the fall of 2014 will now be offered at 30 schools in the spring of 2016 (23 of which will be paid for by the five firms).

While the students won’t be able to sit for the exam until they’re employed by and sponsored by a member firm, the course will help students prepare for the exam.

Edward Jones, who was the first firm to partner with STC and has sponsored the course at 18 universities to date, chose schools with strong business and finance programs or specifically financial planning programs.

“I think the depth of that material and probably the unfamiliar nature of that material makes learning it in a college setting more advantageous,” said Doren of Edward Jones.

Scottrade chose universities near its corporate headquarters in St. Louis to make a local impact.

“We were pleased to sponsor STC courses at two local campuses, Webster University and the University of Missouri at St. Louis, beginning this spring semester,” a spokesperson said. “We’re hoping to partner with additional colleges and universities in the St. Louis area to help address the industrywide shortage of licensed financial services talent.”

When choosing a college, Wells Fargo Advisors made it their mission to not only tackle the talent crisis but also the diversity crisis apparent in the financial services industry.

This is why Wells Fargo chose to sponsor a Series 7 course at Bennett College, a historically black women’s college in Greensboro, North Carolina. The college’s first Series 7 course will start this spring semester.

According to Ruffin-Stacker, 15 students have signed up for the course for the semester.

“Colleges that we wanted to partner with a very important part for us certainly was the multicultural diversity inclusion aspect of it,” Ruffin-Stacker said. The industry certainly could have a boost, if you will, in the diversity of advisors.”

Following the launch at Bennett, Diane Gabriel, president of WFA Solutions at Wells Fargo Advisors, hopes to expand the program to eight to 10 predominantly African-American colleges that are local to Wells Fargo’s current markets.

When Gabriel started as a financial advisor in 1982 at age 21, she said, there were no other female financial advisors at her company.

“About 10.5% of the FA population was female in 1982. Less than 2% were of color,” Gabriel said. “Here we are approximately 35 years later and women make up approximately 15% of the population and I don’t believe we’ve moved very much at all on the percentage of color. That’s one of the real, I guess, disappointments in the financial services.”

— Check out Investment Advisor magazine’s 2016 Career Guide.


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