ARLINGTON, Va. – Is the wealth management industry headed off a demographic cliff?
There are 40,000 fewer advisers across all channels of the industry than there were in 2008 and more CFPs are over the age of 70 than under the age of 30, Pershing Advisor Solutions CEO Mark Tibergien said at NAPFA's Fall Conference.
"As we look at how firms are vying for transition, it's very disturbing that we, as a profession, have not invested in our future," Tibergien explains, adding that there is hope. "We know there is opportunity for how this business unfolds."
Tibergien expects that the next generation of advisers will come from renewed efforts in recruiting and mentoring techniques. And the industry will also need to develop an adviser force that that it is younger and more reflective of the communities they served, he says.
Quote"If you're going to be conscious in promoting diversity, part of this might be about how you begin enlisting the voice that is different from yours." – Pershing Advisor Solutions CEO Mark Tibergien
"If you're going to be conscious in promoting diversity, part of this might be about how you begin enlisting the voice that is different from yours," he says.
Some firms are already making headway in grooming new talent.
Tom Orecchio, principal and wealth manager at Modera Wealth Management in Westwood, New Jersey, says his firm has focused on recruiting next gen advisers through its internship program.
"They get a feel of what it's like to work at a fee-only wealth management firm," Orecchio says. "Young kids are great on computers so they get a lot of exposure to Excel and Powerpoint."
The firm, which manages $1.8 billion in client assets, has built its internship program with a focus on recruiting talent from colleges and universities near its four offices in Boston, New Jersey, Atlanta and Inverness, Florida, he says.
"We look at colleges like Boston College so they can to feed our Boston office," Orecchio explains. "In New Jersey it could be Fairleigh Dickinson [University] or William Patterson University's financial planning program."
Michael Joyce, president of JoycePayne Partners in Richmond, Virginia, says his firm implemented a two-way mentorship program that pairs his youngest recruits with the firm's senior wealth managers, a technique he picked up from a previous seminar hosted by Tibergien.
Joyce says the firm, which currently has 22 employees and manages $630 million in client assets, welcomes new ideas from its youngest employees in hopes that they may one day take the reins.
"Some of the best ideas come from people who don’t have the baggage and constraints that [the senior advisors] have developed over the years, or the biases; whether they're implicit or not," he says. "We think it's a good way to help us run our business and help us come up with solutions for our clients."