Aspiring financial advisors may find that time is on their side. The average age of advisors now in the field is 55, and about one-fifth are over age 65, according to a 2019 J.D. Power study.
Clearly, the wealth management industry is going to be looking for some younger talent over the next few years. With those under the age of 40 comprising only about 11% of the advisor population, the search should be well underway for young talent.
Young financial advisors may soon experience a job seeker's market as financial services firms rush to bolster their practices. You should start thinking about how to set yourself apart as a candidate and as a professional in the field.
- The financial advisory field is graying, with many now close to retirement age.
- Young entrants have a big advantage in their comfort with social media tools and technology change.
- At any age, a financial advisor needs to stay on top of financial industry trends and news.
Never Stop Learning
The new generation is expected to shake up an industry that is fairly tradition-bound. Younger advisors, in the J.D. Power survey, said they see social media as a powerful tool for communicating with clients and prospects, but their employers sometimes explicitly forbid its use. They also are knowledgeable about the latest technology used in their industry and expect their firms to use it.
Meanwhile, the global financial markets are constantly evolving, which means that financial advisors must continuously be learning to avoid falling behind. Even financial advisors who would never recommend that a client dabble in emerging markets, cryptocurrencies, or ruthenium must be able to discuss them in-depth.
Financial advisors should also keep on top of financial news and trends by subscribing to industry publications, attending conferences, and engaging in other activities designed to improve the value proposition to clients. By keeping on top of these changes, young financial advisors can ensure that they’re positioning themselves for the future while helping their employers adapt to new and upcoming trends.
Last but not least, financial advisors need to keep on top of current regulatory trends.
Connect Personally With Your Clients
There have never been more options for someone looking for financial advice. Exchange-traded funds make a do-it-yourself approach easier and robo-advisors are available to take care of the details.
Young financial advisors shouldn’t forget the importance of relationships in an increasingly digitized society. Financial advisors set themselves apart by connecting with clients on a personal level to deliver better value over the long run.
The need for personal connections is much more than a nice-to-have feature of any practice. By 2024, robo-advisers are expected to have about $1.2 trillion in assets under management worldwide.
Incoming financial advisors will have to grapple with these trends over time much more than their predecessors in the business.
Young advisors can best position themselves by focusing on the areas where they can add value rather than trying to compete directly. They may even want to consider partnering with robo-advisors to handle the automated aspects of financial planning, while they keep control over the big picture, respond to unexpected events, and communicate personally with their clients.
Invest in Your Professional Growth
Financial advisors are familiar with the concept of compounding interest. The same principles apply to time spent on professional growth.
Young advisors should always be reading books and articles, taking online training courses, volunteering with professional organizations, and securing new educational credentials to continue enhancing their value to both clients and employers.
In addition to building up their own worth, young advisors should look to give back to others early and often. Mentoring younger financial advisors or students is a great way to keep up on basic knowledge. Participating in government requests for input on policy is another great way to give back to society.
Why Are There So Many Financial Advisor Jobs?
Like all high-stress jobs, there's always a fair amount of turnover among financial advisory firms.
That aside, there's a generational change underway as well. The average age of advisors now is 55, and about one-fifth are over age 65, according to a J.D. Power study.
That's good news for the younger generation of newly-minted financial advisors, whose skills are in demand.
How Can I Succeed as a Financial Advisor Just Starting Out?
Veterans of the financial services business will tell you that the first and most difficult task is to build a book of clients.
You might consider using your youth as an asset. Many financial advisors go for a niche clientele. Your niche might be people like you: young, well-paid professionals just beginning to build long-term wealth.
Do I Have to Be Tech-Savvy to Be a Financial Advisor?
These days, a financial advisor is expected to be adept at the software packages most commonly used by advisors and their savviest clients, like MoneyGuidePro and eMoneyPro. Moreover, you need to be looking ahead to see what's coming that can give you and your clients an edge.
The Bottom Line
The aging financial advisory business will soon be creating many job opportunities for young aspiring advisors looking for a spot in the business. When the time comes, these young advisors can set themselves up for success by always learning, maintaining a personal touch, and investing in themselves and others.