Looming talent shortage compels RIAs to take
action now, to sustain the industry’s growth for the long haul
Personal financial planning is a fulfilling, flexible, and
financially rewarding career path – and one that is largely
overlooked by job-seekers. That’s a challenge for a registered
investment advisor (RIA) industry that needs to attract a new
generation of talent to help sustain its growth well into the
future, according to a comprehensive, industry-first research
project1 commissioned by TD Ameritrade Institutional2.
To better understand the challenges RIAs face in attracting and
developing new talent, TD Ameritrade Institutional surveyed more
than 2,000 advisors, students, career-changers and university
program directors to learn more about what current job seekers look
for in a career and the recruiting headwinds RIAs may face. The
research set out to measure the overall awareness, familiarity and
sentiment of these key groups toward the RIA career path.
What it found is that many students and career-changers don’t
know that the financial planning career exists, even though RIAs
offer many of the benefits job-seekers desire.
“Much needs to be done to make the financial planning profession
more attractive and sustainable, and our first job is to make it
more visible,” said Kate Healy, managing director of Generation
Next at TD Ameritrade Institutional. “With so many advisors
expected to retire in the next decade, combined with the rising
demand for financial advice, our industry needs to expand its
access to talent if it hopes to be sustainable and serve future
generations.”
TD Ameritrade intends to use the insights generated by the
research to develop programs that can help RIA firms attract young
professionals and expand the pool of potential talent. Below are
some key findings from the research:
Awareness of the RIA profession is low outside the industry,
yet interest grows the more people know about it. Fewer than
half of potential job seekers surveyed knew what an RIA is, but
their level of interest nearly doubled after learning more about
the career path.
- Only 37% of students were aware of the profession, but 63%
expressed interest after learning more about it.
- Likewise, 44% of career-changers were aware, 64% showed
interest after learning more.
Most advisors are hiring, but they need to cast a wider net
to attract Generation Next. The focus of most recruiting is on
experienced advisors with an existing client base, but that can
exclude high-potential students, career-changers, and professionals
from diverse backgrounds.
- 57% said their firms have hired new associates in the past
year.
- 56% said their firms offer internship programs.
- 36% of advisors rely mostly on referrals, when hiring.
- 7% use recruiting and LinkedIn for sourcing potential
hires.
Lack of familiarity and misinformation create headwinds for
recruiting career-changers and students. The biggest barrier
for students and career-changers is a lack of interest in what they
perceive to be characteristics of a financial planning career, many
of which are inaccurate.
- 37% of undergrads would prefer “to do something else.”
- 31% aren’t interested in finance, while 35% say they’re not
interested in sales.
- The biggest turn-offs for career-changers: fear of starting
over or losing tenure (46%), and a lack of interest in sales
(41%).
- 34% of career-changers are worried about “unsteady income” --
another misperception.
It’s not just about numbers. Advisors say people-oriented
skills are important when assessing job candidates, perhaps even
more than math and analytical skills.
- 75% of advisors say the enjoyment of working with people is the
top quality for candidates.
- Advisors also look for self-confidence (71%), clear
communication (70%) and entrepreneurial spirit (66%) as important
skills.
The good news for RIAs: Many potential job seekers want the
things an RIA career offers. Most students and career-changers
say they are looking for work-life balance and purpose, in addition
to competitive compensation, when considering a career.
- The majority of students (53%) and career-changers (52%)
prioritize work/life balance.
- Compensation is the No. 2 deciding factor for 53% of students
and 45% of career-changers.
- Personal fulfillment is the third most-cited factor for 35% of
students, 38% of career-changers.
“Though there’s been plenty of discussion about the demographic
challenges facing our industry, TD Ameritrade Institutional
embarked on this important research project to shed light on the
issues. Our findings reinforce the urgent need for our industry to
take action,” said Healy. “Working together, we need to cast a
wider net to attract the next wave of talent. We need to step up
our game at colleges and universities and even high schools. We
have much to do, but the good news is: we can do this.”
Learn More, Take Action
For more than a decade, TD Ameritrade Institutional has been a
leader2 in developing programs to attract and foster a next
generation of RIAs, helping elevate the profession on campuses
across the U.S., furthering industry sustainability, and
championing women and diversity3.
To learn more about strategies and programs to find and attract
nextgen talent, RIAs that work with TD Ameritrade Institutional can
visit the Education Center through Veo® and Veo One® to access
guidebooks and other resources. Other advisors are invited to visit
www.tdainstitutional.com/why-ria/advocacy or call us at
800-934-6124.
1 TD Ameritrade Institutional commissioned a comprehensive
research study with an independent research firm to better
understand how the financial advisor industry and its career
opportunities are viewed in the marketplace. The research included
online qualitative and quantitative research with more than 2,000
advisors, students, adults changing careers, and university program
directors surveyed between January and May 2019. 2 TD Ameritrade
Institutional is a division of TD Ameritrade, Inc., a brokerage
subsidiary of TD Ameritrade Holding Corp. 3 Wealth Management
Industry Awards, 2016, “Outstanding Achievement in Corporate Social
Responsibility”. 4 TD Ameritrade Institutional named a “Diversity
Champion” in the 2019 InvestmentNews Diversity & Inclusion
Awards.
About TD Ameritrade Institutional
TD Ameritrade Institutional empowers more than 7,000 independent
registered investment advisors to transform the lives of their
clients. It provides powerful technology and resources that help
simplify running a business and let advisors spend more time doing
what matters most — serving their clients. Through meaningful
innovation, steadfast advocacy and unwavering service, TD
Ameritrade Institutional supports RIAs as they build businesses
that positively impact their clients and communities. TD Ameritrade
Institutional is a division of TD Ameritrade, Inc., member
FINRA/SIPC, a brokerage subsidiary of TD Ameritrade Holding
Corp.
About TD Ameritrade Holding Corporation
TD Ameritrade provides investing services and education to more
than 11 million client accounts totaling approximately $1.3
trillion in assets, and custodial services to more than 7,000
registered investment advisors. We are a leader in U.S. retail
trading, executing an average of approximately 800,000 trades per
day for our clients, more than a quarter of which come from mobile
devices. We have a proud history of innovation, dating back to our
start in 1975, and today our team of 10,000-strong is committed to
carrying it forward. Together, we are leveraging the latest in
cutting edge technologies and one-on-one client care to transform
lives, and investing, for the better. Learn more by visiting TD
Ameritrade’s newsroom at www.amtd.com, or read our stories at Fresh
Accounts.
Brokerage services provided by TD Ameritrade, Inc., member FINRA
(www.FINRA.org) / SIPC (www.SIPC.org)
Source: TD Ameritrade Holding Corporation
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version on businesswire.com: https://www.businesswire.com/news/home/20191014005079/en/
Media Contact: Joseph A.
Giannone Communications + Public Affairs W: 201-369-8705
joseph.giannone@tdameritrade.com
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