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.
Our industry talent requirements have also evolved over the years. Yes, we continue to hire junior analysts, client service specialists, operations personnel, internal sales associates, etc., but the new world we live in also requires talent in analytics, digital marketing, coding, compliance, talent management and portfolio design, just to name a few.
Universities Are Joining
Universities and colleges are now focusing on the value proposition of their education and how education leads to improved lives. We are starting to see statistics on things like internships offered per year, average time to employment and average student starting salary.
We also are seeing more universities and colleges offer majors such as financial planning and analytics, as well as classes to prepare for the certified financial planner exam. A growing number of universities and colleges are giving their students hands-on experience, from allowing them to manage their endowment funds to training them to become Bloomberg-certified. Schools also are hosting women-in-finance events and alumni networking events, and are beginning to bring the private sector closer to the student population.
Partnership and Collaboration Are Key
Our industry must think of creative ways to increase and scale its efforts. This could be done through collaboration on messaging, and partnerships, like the Envestnet Institute on Campus program, an industry-sponsored web-based course that provides college students with industry knowledge and mentorship. Simply stated, corporations should be sharing best practices and collaborating on initiatives to close the talent gap.
Standardized industry messaging on topics like career paths and perceptions could become the protocol, thus erasing the lack of awareness and perception of industry jobs. These messages could be conveyed through an efficient use of the channels used by today’s students, such as social media and content-sharing platforms.
“Incredible opportunities are there for these students. But they really need help seeing the path and building the confidence to take it,” said Michael McGrath, executive vice president, Private Client Solutions at Thales Trading Solutions LLC and adjunct professor at St. Peter’s University in Jersey City, New Jersey.
As individuals who have personally benefited from working in this industry, we have a responsibility to give back, and not just in terms of money. We need to give our time, energy and advice so the industry continues to innovate, grow and build opportunity.
Jim Seuffert is program director for Envestnet Institute on Campus, which aims to build a bridge between colleges/universities and investment management by training talented young individuals and positioning them for employment across various areas of the industry. Its goal is to train 5,000 students from multiple academic institutions across the United States over the next five years. Students will benefit from relevant, broad-based, practical training on investment management. The program is made possible through a collaboration between Envestnet, Fiserv and DAKdirect.