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Financial Planning > College Planning

Inside TD Ameritrade's Fight to Close the Advisor Talent Gap

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“It’s been the year of diversity; it’s really taken hold,” said Kate Healy of TD Ameritrade Institutional, during the firm’s annual LINC conference for advisors  — which is taking place in San Diego this week.

Across the industry, professionals have homed in on the lack of diversity and inclusion in financial planning and begun to take steps to rectify the condition. That was evident in the first-ever diversity summit sponsored by the CFP Board’s Center of Financial Planning last October that brought together leaders and advisors from across the profession.

But her biggest takeaway from the summit, said Healy, TD Ameritrade’s point executive on D&I and “Generation Next,” was the center’s research confirming the startling lack of diversity in the profession. “We all knew the numbers are low,” Healy recalled, but “when you see it in your face” that only 3.5% of the 80,000 certified financial planners are Latino or African-American, “you know it’s not right.”

It also doesn’t reflect how the country looks now, and the country is changing faster than many advisors realize, she said. Millennials, she pointed out, are the most diverse generation in the nation’s history, and they tend to react negatively to the lack of diversity in any group, including companies that they might otherwise consider working for.

Diversity isn’t just about race or ethnicity. It’s about having a diverse array of experiences and insights that comes from being a woman, for example, or a career changer or a former member of the military. Attracting a more diverse population — including those three examples above — to the profession can also help solve the talent shortage, Healy suggested.

TD Ameritrade Institutional is doing its part in exposing younger people to the profession. This marks the 10th year that college financial planning students are attending the RIA custodian’s annual LINC  event.

Over the years, 370 students have attended the national conference, Healy reported, from 30 colleges and universities. This year, there are 63 students from 30 schools attending; five of those 30 schools are historically black colleges and universities (HBCUs): Delaware State, Prairie View A&M, Olivet Nazarene University, University of Texas Rio Grande Valley and Winthrop University.

The firm doesn’t just welcome students from those schools; it pays for the students and their program directors to attend. Moreover, two of the HBCUs on the above list received TD Ameritrade Institutional ”emerging grants” in past years of $25,000 to help those schools establish their financial planning programs.

What can individual advisors do to diversify the advisor workforce and to help address the talent shortage? One step is to understand the value of diversity in their firms and to build a staff that is more diverse in terms of gender, race, ethnicity and even sexual orientation.

Another is to support financial literacy programs in high schools or even elementary schools. Healy said only 17 states now require students to take a financial literacy course before they can graduate from high school. Even in those states, however, the curriculums vary greatly in their rigor.

There are many good financial planning programs in colleges and universities, but not enough graduates to close that talent gap. So one step is to improve the awareness among younger people not only that financial planning exists as a profession, but also that there are many job duties that exist in financial planning firms, such as in operations or customer service.

Healy said the CFP Board’s Center for Financial Planning is close to publishing a white paper by industry expert Philip Palaveev that explores the different career paths that exist in financial planning firms.

Raising awareness of the profession and hiring more diverse staff for internship and full-time positions is only part of the solution; there’s also a need to help those staffers succeed through mentorship programs.

TD Ameritrade Institutional provides an internship guidebook for RIA firms to ensure, for example, that those interns rotate through all the different roles in an advisory firm. Internship programs are a very economical way to attract new staffers to an RIA firm, she said, since, depending on location, a firm can hire an intern for $15 an hour or spend “maybe $8,000” total for an intern’s services.

Healy said there’s also a crying need for planners to serve as adjunct professors in college financial planning programs. Planners can even take advantage of a teacher training seminar offered by Columbia University’s School of Professional Studies and the CFP Board Center for Financial Planning that prepares financial planners for teaching topics they know well in CFP Board-registered programs.

Why does TD make its investments in college financial planning programs and students? Why is it working on the diversity issue? Healy said, “we have to invest in the profession,” and its support of those students might help older advisors with their current staffing problems and eventual succession planning issues.

The RIAs attending LINC benefit from rubbing elbows with younger people as well. Healy told about one advisor who was meeting with a student but said she needed to take a break to conduct a demo with a tech vendor at the conference. Then the advisor rethought her need to leave and decided instead to take along that student to help evaluate the technology tool.

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