Fidelity is urging firms to "tone down" sales aspects of planning jobs when trying to recruit new Gen Y advisors, raising the hackles of at least one fiduciary expert.

"To the extent that the sales responsibilities are not fully disclosed, that's not a good thing," says Knut Rostad, president of the Institute for the Fiduciary Standard. "That's blatantly a bad thing to do."

On the contrary, a Fidelity spokeswoman says, the custodian is not urging non-disclosure of sales responsibilities to young planners or college students.

The point is that "there are several aspects of the advisor profession, and sales is just one of them. So, play up the parts of the job that [candidates] may not be aware of," says Fidelity spokeswoman Kate Taylor.


The advice is included in the custodian's new far-reaching study, titled Recruiting Redefined, that examines how firms can overcome a huge talent gap in the planning field. One indicator of the scope of the problem is that there are more CFPs over the age of 70 than there are under the age of 30, the study found.

The study, which Fidelity describes as "breakthrough" and displays as an interactive feature online, took an unusually broad approach in using multiple research methods. These include online surveys and in-person focus groups that were "blind" and did not identify Fidelity as the sponsor. The 600 participants included decision makers at financial advisory firms, new financial advisors, college students, young financial professionals, college counselors and career counselors.

The study found that more than 50% of Gen Y prospects it surveyed, all students, were turned off by the concept of selling on commission or being pressured to make sales.

Researchers arrived at this conclusion after showing focus groups two job descriptions: one, an industry boilerplate that describes sales responsibilities, and another that emphasizes more holistic planning.


In all, "51% of students felt that that [the latter] job description was more appealing," Taylor says. "It's just showing that something as simple as a job description on your website [may] make the job description more appealing to candidates."

Dan Jackson, a 22-year-old advisor and New York Life agent in Leesburg, Va., says he encounters the difficulty of selling a sales career every time he speaks to sororities and fraternities trying to recruit new agents to his firm.

"I think that's why I haven't gotten the amount of response from the people I talk to," says Jackson, who finds that few if any follow up with him after his presentations. "People don't want to work for commissions."
For his part, Jackson, who has other family members in the insurance industry, says he's very proud of the work he does and finds nothing shameful in it. He's more than willing to work on a commission basis to get his career started.

For now, at least.

"I would definitely say that that is more appealing being able to work with someone with their investments on their stocks and bonds than in doing the transactional work of selling life insurance," he says. "I don't want to sell life insurance all my life. I want to become a CFP. But I've got to start somewhere."

New York Life, he says, will pay for him to study for and complete his CFP.


The Fidelity study also found that planners from insurers like Jackson's employer, New York Life, banks or other large firms often make successful hires.

More than 90% of these professionals, who average 2.6 years in the workforce, are in the market for new jobs, the study found.

In all, 75% of the hiring managers surveyed said these young professionals outperformed advisors recruited directly out of school. This group may come from the finance, insurance, banking, professional, scientific and technical services fields, the study found.

But whatever the source, advisory firms and the larger organizations that work with them need to reconsider how they recruit, says Jylanne Dunne, senior vice president of practice management at Fidelity Wealth Services.

"We've never done research like this where we went out to an entire ecosystem," Dunne says. "What we learned is that it's time to change for all of us, for Fidelity for the CFP Board." Fidelity is also sponsoring a new career center on the board's website that aims to match up new planners with jobs and vice versa.


An overarching finding of the study is that only two out of 10 college students and young professionals were even aware of the field. But, after learning about it, most said they wanted to learn more.

"It is lack of awareness among Gen Y talent -- not the more commonly perceived lack of interest -- that is fueling the advice industry’s talent shortage," the survey authors wrote.

The study makes three general recommendations for recruiters to address this issue:

  • seek out different talent pools, because the most qualified candidates may be working in adjacent fields; 
  • approach networking and referrals in a new way to recruit the right talent;
  • and remember that "Gen Y talent is interested in the advisor profession, just not interested in how firms are describing it as a sales-focused role."


It's that kind of language that concerns Rostad, who thinks the study could be interpreted to encourage outright misrepresentation.

"There's some irony or justice there, depending on how you want to look at it," Rostad says, given that the financial services industry has taken a huge reputational hit in recent years because of severe abuses that are far more commonly appreciated today than in years past.

"I think that if 23-year-olds and 25-year-olds are not interested in sales, it's probably because of what their impressions are of what sales means," Rostad says.

Unlike the 8% of new advisors in the survey who said sales aren't a big part of their jobs, Jackson says that, going in, he understood that his job would be based on commission sales.

Every new hire should be equally well informed, he thinks.

"People want to know the job they are getting into," he says. "It would have been pretty crappy in my situation to accept a job where I think I'm doing one thing and I end up doing another."

Some firms do 50% commission sales and 50% fees. Others do 90% in on one side or 90% on the other side.

It all comes down to how each firm describes its open positions to prospects and how Fidelity's advice is interpreted, Jackson says:

"I would say that it's a very fine line. It's a very gray area."

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