A recent Deloitte study found that nearly 50% of financial services executives say competition for global talent continues to be their most pressing concern. The shortage of talent is a significant threat to growth of the financial services industry, particularly as demand for advice is increasing. Competition for qualified talent is expected to soar, and if the industry does not address the issue, it could cost financial services companies millions of dollars in lost economic opportunity.
As director of the Envestnet Institute On Campus program, I have spent a considerable amount of time on college campuses across the United States, lecturing, mentoring and simply listening to the next generation of potential talent. When it comes to identifying the reason that our industry is currently challenged by the talent shortage, I believe there are two fundamental issues: perception and awareness.
When I interact with students, either in a lecture or in classroom setting, the following questions are raised on a regular basis:
- What value does your industry bring to society, both locally and globally?
- Isn’t there a high stress level in the industry?
- Won’t technology be replacing the financial advisor?
How is our industry positioning itself to the next generation of potential talent? Students want their careers to contribute to the greater good, they value work-life balance, and they want to be in a profession they know will withstand the test of time.
To appeal to this audience, we need to be sharing the positive stories of the good our industry does and the value it adds to people’s lives. The more examples we can share that can demonstrate the key role that advisors and our industry play in investors’ lives — whether it be planning for retirement, funding a child’s education, helping with a transition to a new job or recovering from a divorce — the better.
Yet, there remains a perception among talent that we are a commission-driven, stress-inducing, cold-calling industry. The fact is that the majority of the job opportunities we offer have nothing to do with these activities. Rather, many of the jobs, such as marketing, operations, relationship management and technology, are replicated in other industries and are therefore transferable.
Finally, how can we reassure the next generation that robo-advice will never replace human advice? Certainly, robo-advice will continue to evolve and be attractive to a certain segment of clients; however, as financial advice becomes more complicated and conversations move beyond simply managing portfolios, human interaction will continue to be necessary.
To help shift the perception, the university and industry connection is crucial. We must bridge the theoretical to the practical. When engineering and accounting are taught at the university level, those jobs are defined, and a natural path is created. This is not the case in asset and wealth management; there are multiple ways to approach the opportunities that our industry has to offer.
Our industry is evolving so quickly that we have neglected to tell the next generation of talent about all the possible career paths that exist in our world. Based upon my experience, when asked to describe the two or three jobs that come to mind as possible careers in finance, 90% of student responses are investment banker, private equity or portfolio manager.