A Formula for Helping Millennial Advisors Succeed

Much has been written about the aging financial advisor population and the industry’s inability to attract Millennial advisors to back-fill those departing advisors.
According to a 2014 Cerulli study, approximately 33 percent of today’s 300,000 advisors will be retiring by 2024. Despite the fact that the average advisor is currently in his mid-50’s, only 29 percent have a “succession plan,” according to Moss Adams. Whatever the reasons why they don’t, one thing is clear: they are not practicing what they preach. They spend countless hours counseling clients about the need for long-term planning, yet…they have not done so for themselves. Often, it takes a tragic event to motivate people to act and by then, the options are limited.
What could be preventing Baby Boomer advisors from adding a Millennial advisor to their team, you ask? It could be their pre-conceived ideas about Millennials (lazy, entitled, easily distracted, etc.) Advisors may also view past experiences as an indicator of future failure.
The fact remains that if Millennial advisors are going to be successful, it will require Baby Boomer advisors taking a lead on bringing them into their practice and properly training them. By recruiting Millennial advisors today, Baby Boomer advisors will be setting the stage for a successful transition – placing their clients in the hands of someone they trust to carry on their legacy.

The Generational Gap

A “generation gap” is defined as a difference of opinion on music, values, politics, etc. that occurs between one generation and another. This term was first used in the 1960’s, at a time when the younger generation (Baby Boomers), seemed to be rebelling against the established values of their parents. Clearly, tension between the older and younger generations is not a new concept, only now it is the Baby Boomers that are holding on to traditions instead of accepting new realities. Baby Boomers used to adhere to the motto, “Don’t trust anyone over thirty.” Have they totally reversed their thinking to not trusting anyone under 30 (e.g. their own children)?

Bridging the Generational Divide & Recruiting Millennial Advisors

Each generation has a wealth of information to pass on to the others. For instance, the older generations provide great economic and life-experience knowledge, as well as wisdom and a willingness to mentor, while the younger generations offer insight into current pop culture, technology, and social media trends.
In order to attract and retain Millennials, it is critical to understand who they are, what they value, and how someone can benefit from partnering with them. That said, the most important factor to ensure a Millennial advisor’s success is the senior advisor’s investment of time and resources into the relationship. As you on-board your Millennial advisors, it is important to create a culture that nurtures, supports, and fosters a collaborative team environment. If done successfully, positive results will follow and both parties will benefit from the experience.

4 Tips on Training and Retaining Successful Millennial Advisors

1. Regular Feedback – Millennials need regular feedback and a set of expectations in order to improve and feel engaged. While a manager may feel frustrated with a “lazy” Millennial who isn’t performing at the expected level – it can often be linked back to the supervisor not articulating what that expected level is and what the junior-level person needs to do or learn in order to get there. When senior advisors don’t invest in their Millennial advisors and help create a path within the company, these junior people will look for job opportunities elsewhere, creating turnover that costs firms tens of thousands of dollars per employee each year.
2. Mentorship – This is a door that swings both ways. Not only should Baby Boomer advisors devote time to review meetings, teaching the basics of marketing and prospecting, and providing other practice management tips, but they should also ask Millennial advisors to share their knowledge of new technology platforms and how they can build relationships through social media.
3. Community Service – One of the core values of Millennials is their desire to help people and change lives. Therefore, making social responsibility a part of the company’s core values and offering Millennials a flexible work schedule that allows them to participate in community service will appeal to their emotional drivers and help improve retention rates.
4. Work-Life Balance – Young financial professionals and college students named having a good work-life balance as the most important factor in choosing a career. Millennials value a career that impacts the lives of others, offers job security, and fosters a collaborative work environment. Aren’t those the same attributes that led Baby Boomers to become advisors in the first place?

Taking the First Step

A terrific opportunity for both sides to begin building a strong relationship is to offer a college and post-college internship. This provides potential recruits with insights into the business, teaching them how to interact with senior executives and giving them a sense of how a client-focused culture operates. Internships have proven to be a valuable tool for “testing the waters” and identifying successful candidates with limited risk and investment for the hiring advisor.

Looking Ahead

In the end, Baby Boomer advisors have a golden opportunity to teach Millennial advisors the “right way” to build a successful wealth management business and leverage their years of experience. Millennials value that knowledge and wisdom, so senior advisors should have no fear investing their time and energy in them; it is time well spent. With the proper direction, Millennials can prove themselves to be valuable assets in helping the company adapt to the changing market. And together they can create a succession plan that cares for their clients and helps next generation of advisors succeed and prosper. Now that’s legacy where everyone benefits.