December 27, 2017
- Managing Director, Generation Next, TD Ameritrade Institutional
Welcome to January! If you’re like me, you try to make a few realistic resolutions for both your personal and professional life. But I’m not here to be your life coach. I just have one simple question: Is one of your goals to do a better job at attracting NextGen talent to your firm?
If this is on your top 10 list of things to improve in 2018 . . . good. Let’s get started. If it isn’t, read on because maybe it should be something you consider in the year ahead.
Why focus on NextGen?
If you caught my last blog about developing talent, I shared 30 trillion reasons to recruit NextGen advisors. Today, I ask you to consider that the majority of the population still doesn’t know what an RIA or even a fiduciary is. You and I live in a world where everyone knows the ins and out of the industry. But when you take a step outside, you might be in for a surprise. Give it a try next time you are with a group of people from somewhere other than financial services.
What can we do about it? It’s up to today’s advisors to educate the next generation about the benefits of the RIA career option and to help cultivate strong advisors for the future.
Who is hiring the NextGen advisors and why?¹
• In 2015, 11.1% of firms hired a NextGen advisor.
• In 2016, 21.5% of advisors reported hiring one.
The number one reason—reported by 61%—was to improve client service. Second was to ac-quire younger clients.¹ Despite the slow move toward hiring NextGen advisors, 70% of firms report having a difficult time hiring revenue-generating roles.²
Program Directors’ voices heard
Planting the seeds for the next generation is about creating awareness in schools and providing opportunities for education, training and mentorship. We’ve long advised that RIAs should form mutually beneficial relationships with financial planning Program Directors from their local colleges and universities.
Over the years, we’ve heard some great stories and received a lot of positive anecdotal feed-back. We’ve come to value the input of program directors so much that we decided to formalize things by implementing the industry’s first-ever survey of financial planning program directors. TD Ameritrade Institutional reached out to each of the 105 four-year colleges and universities with CFP-Board listed undergraduate financial planning programs in the United States.³
We discovered that although the RIA channel is discussed within the curriculum, independent advisors can help their cause by increasing their engagement with students. Here are a few things we learned, and affirmed, from the program directors:
• The #1 most effective thing RIAs can do to increase awareness and build their talent pipeline is hire more interns. (I may have heard this somewhere before…hmmm.)
• More RIAs should participate in on-campus career days and become guest lecturers, or even adjunct professors.
• 70% of programs surveyed currently teach students about RIAs, largely by bringing in advisors as guest lecturers and by talking about the RIA channel as a career option.
• 54% of the schools have an on-campus student chapter of a trade organization, typically the Financial Planning Association.
• Close to 80% of schools offer networking events for financial planning students.
University of Akron program director to RIAs: Be persistent
Dr. Barry Mulholland, Director of Financial Planning at the University of Akron, is proud of the program the university offers. Students can earn a degree in financial planning within the finance department. While the program has been around for 18 years, it’s taken off in the last few — 88 students are currently enrolled with a major or minor in financial planning.
I recently asked Barry for his thoughts. “Don’t wait until the day you need an intern to start looking,” Barry advised. “The key is to be involved ahead of time. The student groups are always looking for guest speakers. You can serve on an advisory board. Any opportunity to connect students and advisors is mutually beneficial.”
He added, “Like many of the programs in the survey, we are a smaller school. We wear many hats and are often short-handed. If you send a communication that goes unanswered — keep trying. Be assured, we want to hear from you. Like you, we are often pressed for time. Don’t be shy – keep asking.”
And if you need support in starting or improving an internship program, there are a lot of re-sources. For example, the University of Akron has an internship coordinator who has HR experience in financial services. Advisors who tie together the resources she offers with the support from TD Ameritrade Institutional have a great toolkit.
Mulholland shared that the program has a great relationship with an advisor who created a scholarship for women in financial planning. Not only does this support the program’s focus on women, diversity and inclusivity, it supports her business. Half of her employees started as in-terns. She sees a student’s skills and passion and harnesses it to help her business grow. In fact, her profitability is higher than her peers and her payroll is lower because they are still growing as group. It’s a great case study and wonderful to see.
Looking forward, Mulholland would love to be able to take more students to industry conferences. But like many Program Directors, he needs support to make this happen. Offering a scholarship would be a great first step in the door to your local university.
We made a big commitment
TD Ameritrade Institutional is committed to fostering the next generation of financial planners. Just take me for example. My singular focus is ensuring the sustainability and success of the RIA channel. I have one priority — helping you attract the talent you need to meet the growing demand for trusted advice.
So take my advice and make the most of the resources and opportunities we offer to help you launch and maintain a successful internship program.
• National LINC: This is a great opportunity to connect with Financial Planning students. With National LINC just around the corner, now is the time to formulate your plan. Are you ready to hire an intern? Be a mentor? Be ready. NextGen advisors are likely to visit your website and your social media pages to get to know you. Make sure these channels truly reflect you and showcase a firm new advisors would want to join.
• Intern guidebooks: We are in the process of updating our in-depth guide to support you as you launch, conduct and transition talent from an internship program. These are step-by-step detailed guides focusing on hiring for NextGen, starting internship and mentorship programs, recruiting, onboarding, retention, employee development and more.
Stay tuned for news on the relaunch of these guidebooks soon. The first versions are still avail-able and full of helpful information on implementing an internship program.
• RIA NextGen Career Exchange: Think of it as our own networking service connecting RIAs with the right NextGen talent for their firm.
I hope to see many of you at LINC. I’d love to hear more about how you are focusing on NextGen in your firm. Let me know. @KateHealy_TDA
¹ IN Advisor Compensation and Staffing Study
² Source: People and Pay 2017
³ CFP Board: Find an Education Program, as of September 2017