It’s no secret that the financial services industry faces an ongoing challenge in recruiting and retaining new advisors. With so many advisors in their 50s, the industry needs new talent to enter and stay in the industry to replace those advisors who retire or leave for other reasons.
With these concerns in mind, LIMRA surveyed today’s young advisors to find out which aspects of their careers are meeting their expectations and which ones are not.
Although many of the attractions and early challenges to the financial services career have remained the same through the years, today’s advisors are approaching their careers differently than previous generations did. Companies that understand this are adjusting their strategies to attract and retain the best talent for the future.
Our research shows that when independent, investment-affiliated and insurance-affiliated firms recruit new talent, they should think in terms of quality over quantity. One common industry practice is to hire a large number of candidates, provide them with minimal support and then wait to see who survives. Millennials are known for their mastery of self-expression, their desire for customization and the need to feel special. The young advisors who spoke with us made it clear that this mass hiring tactic directly conflicts with their principles.
I interviewed with [company name] and thought it was a “cattle herding” approach of whoever makes it. I wanted a company that would have a commitment to those it hired rather than weeding people out to find the right one. … Once you hire someone, make a commitment to them.
— Insurance-affiliated financial professional, age 31
Income potential is still the reason most young adults chose a career in financial services, but only one in four named it as the top reason. While 65 percent overall cited income potential as a reason for seeking a financial services career, 59 percent said they want to make a difference in people’s lives. Many advisors said they initially chose a financial services career for the income potential but now their greatest reward is seeing how they have changed their clients’ lives in a positive way. When candidates are driven by income potential and the desire to help others, their chances for long-term success greatly improve.
Recruiters who communicate how the career reflects both qualities increase their chances of hiring the best candidates.
More than half of young advisors agree that the most difficult part of establishing their career involves building their book of business and gathering enough leads. They also found difficulty with time management, handling rejection and asking for referrals early in their careers.
These are all areas where a mentor can make a significant difference. Three in four young advisors said they had a mentor. However, formal mentoring programs were evident only 18 percent of the time. Most mentoring relationships developed naturally. Young advisors said the most important benefit of having a mentor simply was having access to an experienced colleague who could answer their questions.
The survey also revealed that partnering with other professionals is important to today’s young professionals. More than half said they partner at least some of the time and 44 percent said they plan to partner more in the future.
The most encouraging finding from the study revealed that young advisors have a 91 percent satisfaction rate with their careers. The combination of income potential, making a difference in people’s lives and a flexible work schedule all contributed to the positive satisfaction rate.
Supporting today’s young advisors makes good business sense. By retaining today’s professionals, companies can build a sales force to succeed with future generations of consumers.