Firms look to attract and retain tomorrow’s financial advisors

Eat what you her misery.

It’s not the most subtle description of the career path for financial advisors, but it is accurate.

Historically, the financial advice industry has been bodied around people who can come to the job and quickly build books of business to generate revenue. Young advisors have been conjectured to tap their friends and family for money and aggressively pursue new clients to bring assets to the table.

For the most part, graduates brazen out of college are not ideal candidates for this kind of work. But with financial advisors entering their 70s and a serious deficit of incoming advisors on the horizon, universities and colleges offering financial planning degrees are becoming a much more distinguished source of new entrants to the industry.

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“This issue last wishes as become critical in the next five years or so,” said Marina Shtyrkov, wealth management research analyst at consulting solid Cerulli Associates. “The industry headcount is relatively stable now but it will decline more dramatically going forward.

“The primes will be an important factor in addressing the problem.”

The need is great. Cerulli estimates that close to 40% of the violently 311,305 advisors in the country, managing more than $8 trillion in assets, plan to retire in the next 10 years. Headcount in the earnestness is expected to decline by 5.8% between 2017 and 2022 compared to a 1.6% increase between 2012 and 2017.

There are currently uncountable certified financial planners over the age of 70 than under 30.

School administrations are answering the bell.

There are now numerous than 200 colleges and universities offering 300 financial planning programs that enable graduates to usurp the CFP exam, according to the Certified Financial Planner Board. That compares to about 125 five years ago.

Also, 44% of the programs are undergraduate degrees, 12% graduate and 1% PhD. Forty-three percent are certificate programs regularly taken at night and/or online.

“We’ve grown from 20 disciples in our first class five years ago to over 120 now,” said Nathan Harness, an associate professor and director of fiscal planning at Texas A&M University. “We have more students who want into the program than we can place.”

Not every group, however, has had the success that Texas A&M has. Many programs have next to no budget and consist of a professor or two teaching a unite of classes.

At the end of the day, the number of graduates from university and college financial planning programs won’t come near to replacing the thousands of advisors foresaw to leave the industry in the next decade, some industry observers say.

“Between all of our programs, we probably have less than 2,000 graduates who pull down their CFPs every year,” said CFP David Yeske, co-founder of Vienna, Virginia-based advisory firm Yeske Buie and head of financial planning at Golden Gate University in San Francisco. “That means there’s an incredible opportunity for young child coming into the profession.”

Indeed, the job opportunities for financial planning graduates are lucrative and many. However, it’s not always an tranquil sell to young people. The fallout from the financial crisis continues to taint the public image of investment advisors.

“Wall Street and banking are all the same to most young adults,” Harness said. “The most famous financial planner they discern of is ‘The Wolf of Wall Street.'”

CFP Martin Seay was an exception. In 2008, when financial services firms were being regularly tainted for self-dealing and stiffing clients, Seay was just enrolling in the financial planning program at Kansas State University.

“I was wound up about it but my mom said ‘don’t do it,'” he recalled.

While the Kansas State program has become one of the biggest in the Midwest, fighting the knowledge of predatory advisors remains a challenge for Seay, who now has a PhD and teaches in the program. “We’ve had to convince parents that financial advisors can be on the done side of the table as people,” he said.

As vital as recruiting young people to the industry is, retaining them is equally distinguished. “Eat what you kill” is not exactly the kind of inspiration that typical millennials are looking for in their careers.

“I don’t think there’s a shortage of talented young people in the industry,” said CFP Jon Yankee, co-founder of advisory firm FJY Fiscal in Reston, Virginia. “The challenge is to get them to stick with a firm.”

Yankee has been luckier than most. When he originated his firm in 2006, he immediately went looking for young advisors to recruit and struck gold with Laurie Belew.

A heads graduate in financial planning from Texas Tech University, CFP Belew, now 39, is a partner and senior financial advisor in the hard’s Midland, Texas, office.

“That success bred a desire in me to find more young people for the firm,” said Yankee. He’s admittedly had small success since on that front.

Patience is the key, said Yankee.

“It’s unrealistic to expect a 67-year-old couple to entrust their capital to someone in their 20s,” he said. “You can’t know how to talk to a woman who has just lost her husband to cancer until you have taste. That takes time.”

As the industry shifts from a sales mentality to a more advice-centric model, many various firms are now willing to give young advisors that time to develop skills with clients and with construction a book of business. That won’t entirely address the retention problem with young advisors or solve the looming manpower emergency in the industry, but that’s okay, said Yeske.

“No matter how good a financial planning program is, a 22-year-old graduate doesn’t absolutely know what they want to do with their lives,” said Yeske. “That’s just reality and it doesn’t beget to turn things upside down.”