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Managing Gen Y: What Advisors Must Know

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WASHINGTON -- For all the angst in the advisory industry about succession planning and how Generation Y will fit into the practice, advisor John Augenblick suggests that maybe younger workers aren't so different after all.

To be sure, recent college graduates come to the workplace with a different conception of professional life than older generations, says Augenblick, president of Rockwood Wealth Management, based in New Hope, Pa. -- but younger workers' core expectations are familiar.

"They want a lot of the same things that our other staff employees want," says Augenblick, who spoke this week at Fidelity's Inside Track conference for advisors. "They want to be recognized for their contribution. They want positive reinforcement. They want to feel like they're part of a team. They want to feel like if they don't show up to work today that the firm is going to be worse off for it."


Nevertheless, Augenblick and other generational observers acknowledge that Gen Yers (also known as millennials) generally share some distinctive traits that advisors should keep in mind -- particularly when setting expectations for a new hire's career path.

"A lot of times millennials take things very literally, so if you're putting time frames around things, you've got to stick with it," says Grace Kiem, college relations program manager with Fidelity Investments.

Augenblick explains that he is upfront and precise in laying out the likely career trajectory for a recent college graduate. In the first two years with the firm, he says, the new employee will handle tasks like generating financial plans and producing portfolio reports, all the while working toward the CFP exam. In two to four years, the employee will take on the role of a support advisor and begin interacting with clients, eventually moving into a lead advisor role.

"I tell them that they need to expect the expected," Augenblick says.

He also points out that many Gen Yers are favor a flexible schedule, and are "perfectly comfortable working asynchronously." So, for instance, a millennial at a firm might be more than willing to pick up work on a Saturday morning -- but could also ask the boss to knock off early to head out of town for a concert with friends.

"I think that when you understand that that's how they're wired, that as a leader of your firm you have to be OK with that or address it by setting expectations," Augenblick says.


Those generational nuances will likely play an important role in the growth -- or even sustainability -- of an industry with an aging workforce, say experts.

The research firm Cerulli Associates has reported that the average advisor is 52 years old, and just 5% of advisors are younger than 30. Each year, the industry will see between 10,000 and 15,000 advisors retire.

Yet amid those stark figures, 67% of firms polled in Fidelity's 2013 RIA benchmarking study said that they don't have a succession plan in place.

Recruiting young advisors is a significant challenge. Surveys have indicated that most college students don't have a clear picture of investment advising as a distinctive career within the financial services sector, and tend to conflate advisors with garden-variety stockbrokers.


"They don't understand what the RIA industry is," says Jylanne Dunne, a senior vice president at Fidelity Institutional Wealth Services, who urges firms to engage with the university community and make their presence known on campus through career fairs and other venues. "You have to get out there."

As a practical matter, it can be difficult for advisors at smaller firms to break away from work and drop in on local colleges, Augenblick acknowledges. But even if a firm doesn't have the resources to send an advisor to a career fair or to talk with a campus business group, it can still engage with the university community.

Augenblick says that when his firm was looking to hire a young staffer, he called directors of well-regarded financial planning programs at Virginia Tech and Texas Tech and asked about their best students from the Pennsylvania area where Rockwood is based. It worked. The firm ended up hiring a Virginia Tech graduate -- and with that, Augenblick's firm had a connection with one of the top planning programs in the country.

That type of engagement, he says, is particularly important for smaller RIAs, which students aren't likely to find in the course of their own job searches.

"That person's never going to discover my firm," Augenblick says. "I have to go out and find them."

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