According to Fidelity Investments, only two out of 10 college students and young professionals surveyed for the “Recruiting Redefined” study said they were familiar with the adviser profession, but after simply learning basic facts about the industry, nearly half said would consider a career as a financial adviser. Fidelity says the study dispels other common myths about the recruiting landscape and identifies three key steps firms can take to attract talent to the financial advice profession.
The first suggestion from Fidelity is for firms to refocus on different talent pools. Advisory firms may want to consider recruiting candidates outside the traditional talent pool of finance students and existing advisers. It’s very likely the strongest talent may be working or studying in an adjacent field, Fidelity finds, and many of the skills necessary to become an adviser are exercised in other professions.
According to the study, hiring managers and recruiters are struggling to find qualified talent, ranking “lack of necessary skills” as their most challenging recruiting obstacle. Candidates who already have a certification may be perceived as more desirable, but the study found that young professionals in adjacent fields like insurance and banking may be a qualified talent pool if firms provide them with a pathway to certification. The study found that these young professionals average 2.6 years of work experience, and 91% are in the market for a new job.
More compelling, Fidelity says, is the fact that these candidates appear to be performing well, with 75% of hiring managers surveyed reporting they have seen members of this alternative talent pool outperform advisers recruited directly out of school. Specific industries to explore for recruiting include banking, insurance, technology and scientific services. Advice professionals recruited from these fields appear to thrive with proper support, Fidelity says.
Further, Fidelity urges firms to consider new ways of repositioning the adviser profession to be more appealing to Generation Y professionals who are now coming into their own in the workforce. Gen Y talent is interested in the adviser profession, the study finds—they’re just not interested in how firms are describing it as a sales-focused role.
The study identified how firms can make the profession up to 50% more appealing to candidates simply by repositioning how they talk about the profession to cater more to Gen Y interests. Specifically, Fidelity suggests toning down the sales aspect of the job.
Among the top reasons candidates surveyed said they would not consider becoming an adviser were “too much pressure to sell” and “working on commission.” Meanwhile, firm hiring managers cited “sales ability” as a top attribute in evaluating potential candidates. After reading a revised, hypothetical job description that de-emphasized sales and was more aligned with attributes Gen Y candidates are looking for, such as work/life balance, 51% of students and 40% of young professionals surveyed found being an adviser more appealing.
To help firms apply these strategies, Fidelity Institutional says it is working with the Certified Financial Planner Board of Standards, Inc. (CFP Board) on a new CFP Board online destination for those interested in the adviser profession, the CFP certification and related job or scholarship opportunities.
“The truth is that the looming talent shortage in the advice industry is no longer looming—it’s here, and the typical approach to recruiting is no longer effective,” says Jylanne Dunne, senior vice president of practice management, Fidelity Institutional Wealth Services. “It’s time that we redefine our recruiting efforts so we can begin to make real progress that could benefit the profession for the long-term.”
The study confirmed a lack of awareness of the adviser profession among candidates, with six out of 10 college students reporting that they could not name a single firm that employs advisers. This new reality calls for new recruiting strategies that can help to bridge the gap between firms and candidates, Fidelity says. The study identified how firms can create ambassadors in the community and take a fresh approach to networking in order to find the right talent.
One approach for these ambassadors to take is to let Gen Y do the talking, the study finds. Eight in 10 young advisers surveyed said their experience is much more positive than expected and describe their job as intellectually gratifying and one that allows them to help people, two job attributes among many that align with Gen Y interests.
Importantly, Gen Y candidates ranked family and friends as most influential when it comes to job advice, Fidelity says, followed by college professors and career counselors. Currently, only 32% of advisory firms are effectively engaging career counseling offices, the study suggests.
According to the study, networking is perceived as a top recruiting resource for both candidates and firms; however, only three out of 10 new hires come from referral networks. Gen Y candidates are leveraging networks like social networking sites and student/alumni directories, which are underutilized by firms.
The full results of Fidelity’s recruiting analysis, as well as more information on the partnership with the CFP Board, are available here.