Community Engagement and Next Gen Adviser Recruiting

Working Texas Tech University, Advisor Group has published a new survey examining how young professionals entering the advisory filed think about their current work and future career prospects; researchers also highlight the importance of community engagement for elevating the advisory profession. 

Late in 2017, Advisor Group surveyed students enrolled in Texas Tech’s Personal Financial Planning and Economics divisions about their perception of the financial services sector; this week, the firm has published the results in a report that highlights best practices and strategies to promote successful recruiting.

Advisor Group is a network of independent financial advisory firms including of FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial and Woodbury Financial Services. The collective says it chose to work with Texas Tech University on this effort because the school is “one of the nation’s leading comprehensive public research universities and home to what’s been described as arguably the best undergraduate financial planning program in the country.”

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Survey questions were aimed at identifying young professionals’ future career aspirations and preferences, including the aspects of financial services they consider most attractive. Researchers also asked about the common barriers that may deter young people from entering the field.

According to survey results, four in ten students studying to enter the field expressed concerns about broader negative perceptions surrounding the industry. The students warn that these perceptions have likely steered some of their peers away from the profession. Related to this, many students in the field say they will prioritize “purpose and innovation” as key aspects of their future work as advisers. Respondents further identified the “ability to help others” and “being a part of a dynamic industry” as more important than their compensation package.

Respondents believe that access to a professional mentor is almost as important as completing necessary coursework at college, survey results show. Interestingly, while the existing industry leadership often views greater use of technology relative to peer organizations as a major hiring incentive for young advisers, fully 50% of respondents ranked technological advancements as the least important factor informing their future career choices. Again, access to mentoring and a meaningful career trajectory are viewed as much more important.

“If we are going to be successful in attracting the next generation to our industry, it is critical that we gain a better understanding of their perceptions and priorities,” warns Advisor Group Executive Chairman Valerie Brown. “While we all know as insiders that being a financial adviser is a noble profession, we need to do a better job driving awareness of this in the minds of the next generation.”

Researchers point to a number of ways advisers already working in the field can “get involved and make a difference” when it comes to boosting the broader perception of the industry. For example, advisers may consider volunteering at career days and similar events in high schools—or become a mentor for students in their local college’s financial planning degree program. As an outgrowth of such work, firms might even consider creating an internship program, giving college or high school students the chance to experience how the firm works with clients, solve challenges, and build a book of business.

Researchers further encourage advisers to get involved in their local communities in other ways: “Young people and families, particularly in disadvantaged communities, can benefit from your expertise.” Advisers might consider teaching a course on money management or related topics through a local nonprofit organization, such as Boys & Girls Clubs of America, Junior Achievement, Kiwanis, or Rotary.

“One of the major challenges is that financial planning isn’t recognized as a first-choice degree or career option by many students,” concludes Dr. Chris Browning, a Texas Tech professor and co-creator of the Texas Tech Financial Planning Academy. “Our idea is to expose kids to financial planning at a younger age.”

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Nearly Three-Quarters of Boomers Want to Delay Retirement

More than three in 10 have no retirement budget.

Seventy-three percent of non-retired Americans aged 50 and older expect to delay retirement, The NHP Foundation, a not-for-profit provider of affordable housing, learned in a survey of 1,000 Americans in that age group.

Thirty-one percent haven’t prepared a retirement budget. Among those that have tried to figure out a retirement budget, 62% say that Social Security will comprise half or more of their monthly income. Sixty-five percent have not budgeted for unforeseen health-related expenses. Among those who have no retirement budget and plan on Social Security to provide half or more of their retirement income, 72% said they haven’t accounted for unforeseen health-related expenses.

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There is a disconnect between what kind of lifestyle Boomers expect to lead in retirement and how poorly they are preparing for retirement, NHP says. Seventy percent said they are at least confident they will experience the retirement they aspire to, and among the 73% who are planning to delay retirement, 63% are at least somewhat confident in the retirement lifestyle they will be able to enjoy.

“There is a disconnect between Baby Boomers’ current financial status and where they perceive themselves in retirement,” says Richard Burns, president and CEO of The NHP Foundation. “This wishful thinking carries potential consequences that will likely have a large impact throughout all areas of the economy.”

Citing data from the Consumer Financial Protection Bureau, NHP noted that older homeowners owe almost double on their current mortgage that the same group did 10 years ago. Nonetheless, 60% said the most essential housing aspect of retirement is affordability. Asked what worries them the most about retirement, 36% said the ability to afford quality health care, 28% said having to be dependent on their children, and 22% said being forced to live in an inferior living situation. Eighty-five percent said they would like to continue living in their current home.

Of the 66% who rent or have a mortgage, 76% either have no retirement budget or will rely on Social Security for at least half of their monthly income. Displaying another disconnect, 83% will believe they will be able to age in place, and only 17% of those with no retirement budget or who expect to rely on Social Security for at least half of their income think they will have to move.

“Renting quality affordable senior housing may be the best answer for many older Americans,” Burns says. “NHP and the entire affordable housing industry have made it a priority to create an adequate supply of affordable senior rental housing for Boomers entering the market now and in the future.”

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