JERSEY CITY, N.J., Feb. 5, 2013 /PRNewswire/ -- Pershing LLC, a BNY Mellon company, today announced the release of its Inaugural Study of Advisory Success, an independent study that defines what success means for advisors in today's environment. Based on findings from a survey of 357 advisors, the study also looks ahead to anticipate what will lead the next generation of advisors to flourish in a changing industry.
Every year for the next 10 years, 12,000 to 16,000 advisors in all segments of financial advice will retire 1. In order to keep up with the demand the industry will need to cumulatively add 237,000 new financial professionals. Younger advisors represent the future of the industry at a time when Americans need more financial advice than ever.
"It is evident that the financial advice industry will face a talent shortage in the coming years," said Kim Dellarocca, director of segment marketing and practice management at Pershing. "Each day, the industry sees young advisors exit the industry and never return. Firms need to think about how to recruit and retain younger advisors by understanding their drivers and motivations— and convey to them that being an advisor is a rewarding and fulfilling career."
Younger advisors view success very differently from their older counterparts. It is important to understand these differences in mindset, preferences and behavior. Only by doing so can firms attract and retain talent for the future and build a succession strategy that ensures future viability.According to the study, firms should look to address the following key differences among older and younger advisors over the next several years:
- Younger advisors are more collaborative than older advisors Older advisors are less team-oriented than their younger counterparts, with over 60% saying they prefer to "work on their own" versus being team-oriented, and nearly 33% saying they don't need the right team to achieve success. As a result, generational gaps can create rifts within an organization and team. Organizations should consider and think about their workplace culture in relation to generational differences.
- Younger advisors are less satisfied with the independent model compared to older advisors Among independent advisors, 83% are satisfied with being an independent advisor. Advisors aged 50-59 (46%) and 60+ (53%) are significantly more satisfied with being independent compared to the younger age groups (31% 25-39 and 19% 40-49). Independent firms should ensure they have retention programs necessary to keep younger advisors.
- Younger advisors want to make money and also make a difference Less than half of all advisors think personal gain and reward plays a major role in personal success. Those aged 25-39 are significantly more likely to say gain/reward plays a major role compared to all other age groups. Intuitively younger advisors are more money conscious and are significantly more likely to want clients to appreciate the services they provide compared to older advisors. In the youngest advisor age group (25-39) 73% of advisors believe "having clients who appreciate the value they provide" is one of the top three most rewarding experiences of being an advisor. This compares to 57% for the 40-49 age range, 57% for 50-59 age range and 56% for the 60+ age range.
- Younger advisors are much more likely to embrace and use technology 85% of advisors aged 25-39 describe themselves as being "technology-embracing," compared to 70% and 73% for advisors aged 40-49 and 50-59, respectively. Advisors 60+ in age are far less likely to be technophiles: only 56% describe themselves as technology-embracing.