The US financial advisor workforce is graying. Today, their average age is 51 years old. Given the trend, the industry will soon face a talent shortage. As a growing number of advisors consider retiring or slowing down, firms will need to reconsider the way they operate to attract a younger workforce.

Certainly, older professionals have long dominated the financial advisor community, but the wealth management field is now struggling to redefine itself. According to Moss Adams, the wealth management industry could be short more than 200,000 advisors by 2022.

In order to attract a younger workforce, firms will need to rethink the way they work. Millennial and GenX advisors expect a level of technology that many wealth management firms simply don’t have. But firms are finding that needs to change.

A more advanced approach to CRM, financial planning, and G&A functions remains an essential component of the modern advisor’s office — and the key to recruitment and retention. Today, recruiting and retaining the next generation of advisors is critical to a firm’s growth and succession planning — and improved technology is one way to do that.

Improving profits & recruitment

A strong tech infrastructure remains essential to a successful, efficient and profitable firm and can create more satisfied advisors and clients. In a study by Fidelity Clearing & Custody Solutions (FCCS), tech-savvy advisors posted 42 percent higher assets under management (AUM) in 2016 than their “tech-indifferent” peers, up from 40 percent higher AUM in 2014. They also served more high-value clients ($1 million+) than tech-indifferent advisors. But more importantly, tech-savvy FAs reported more job satisfaction than tech-indifferent advisors.

Outperforming the competition As wealth management firms compete for talent, they can improve recruitment and retention by shedding their stodgy image in the eyes of many Gen Xers and millennials. State-of-the-art technology, which delivers a consumer-like experience for business users, creates improved processes and allows for integrated systems. It also helps firms avoid the common problem of duplicated work, which can be very frustrating for advisors. By optimizing document management, for instance, firms can improve efficiency and move more processes online, creating a paperless environment. It’s clear that automated administrative functions help free up advisors to better service clients and generate more leads.

Shaking off the stodgy image

Early fintech adopters have a significant jump on their peers when it comes to client performance, says Bijan Golkar, CEO and senior advisor for FPC Investment Advisory.

“In the past few years, with the growing number of online planning tools and roboadvisors, there are more educated consumers out there,” Golkar says. “The firms that don’t embrace technology are at a disadvantage.”

And the disadvantage is not only on the client side, he notes. A firm can also face a recruitment and retention nightmare if potential or current advisors view it as a dinosaur in an increasingly automated industry. Younger professionals and savvier, more seasoned financial advisors know that automation is a huge part of their success. They know where the industry is heading.

The future is now

In fact, robo-advice is predicted to hit $489 billion in AUM by 2020, up 2,500 percent from $18.7 billion AUM in 2015.

“Baby boomers are passing on their cash, and they want adaptability,” says Golkar. That means online meetings and the ability to pull up accounts wherever and whenever. And the smart advisors understand [this], especially younger professionals who expect information at their fingertips. The industry cannot operate as fossils, with the old club so entrenched in their ways, not thinking about the technology and, ultimately, their legacy.”

Some may fear the unknowns of tech adoption.

“Really, what we try to do is listen to the client and our staff, find out what annoys them and what makes them happy,” says Golkar.

But he does note that with the right fintech solution, even the most reticent financial advisor can be eager about the improved workflow and client interaction. Not only does tech attract the right kind of advisor, but it also has the added benefit of improving productivity and allowing advisors to do more with less.

By implementing the right tech platforms, wealth management firms can attract a new generation of advisors and up their current staff’s game, ensuring growth and proper succession planning in the process.