More than one-in-three American labor force participants (35%) are millennials, making them the largest generation in the U.S. labor force, according to a Pew Research Center analysis of U.S. Census Bureau data. Research shows that only about 25% of today’s advisors are under 40, with only about 10% under age 30. Older financial advisors are retiring at a rapid rate, by one estimate 37% of the current advisor workforce will retire over the next ten years. This is a small pool from which to find the talented advisors of the future. Studies also show that the retirement of these advisors will leave some $6 trillion in managed assets in need of new millennial advisors to serve these clients. Not only will hiring and retaining millennials help get ahead of the impending talent shortage, but it will also help wealth management firms reach millennial investors.
5 Ways To Attract and Retain Millennial Advisors
1. Workplace Flexibility
Millennials need flexibility in their job. From flexible work schedules to work from home options. According to research from Paychex when asked what their ideal work schedule looks like, 73% of employees would prefer some form of flexible scheduling. To the millennial, the 9-to-5 workday is antiquated, and they desire a better work-life balance than what their parents experienced. While a flextime policy won’t work for every business, management should focus more on output and results, rather than when their advisor team is clocking in and out.
2. Feedback and Recognition
Millennials want to know how they’re doing and typically are not content with a single annual review. They value transparency and open communication with their manager. Millennials desire recognition from their manager as it shows that their efforts and contributions provide genuine value. Provide frank feedback in real-time. Brief conversations, versus formal reviews, will go a lot further in keeping your millennial advisors engaged and satisfied.
According to research by PwC, 83% of financial services institutions stated that a collaborative environment is a highly important priority for their organization. Yet, a WealthManagement.com survey found that 47% of young advisors work solo — despite industry ambitions to promote a team approach. Fostering a culture of teamwork and collaboration will be instrumental in retaining millennial advisors.
To millennial advisors, technology is a crucial variable when considering staying with or joining your organization versus going with a competing wealth management firm. A recent study by Fidelity states that tech-savvy advisors had 35% more AUM per client than tech-indifferent advisors. Millennials are typically early adopters and prefer more mobile-centric devices (versus desktops). Additionally, they like efficiency and automation, two things that technology can readily provide.
5. Training and Professional Development
Millennials are attracted to companies that offer ongoing training and professional development. Millennial advisors who feel that their firm is committed to helping their professional growth are more likely to remain. In the absence of a sound professional development program, millennial recruits may look elsewhere. Mentoring and training play critical roles in retaining top advisor talent.