It's not the money that's necessarily attracting millennials or younger people to the financial services industry. (Photo: Shutterstock)
Changing attitudes about both the work and the public's perception of it are causing shifts in how the next generation of financial advisors views the profession and the structure of their careers—with matters other than compensation and the latest technology taking a back seat to the importance of having a worthwhile purpose in entering the profession.
In a joint survey from Texas Tech University and Advisor Group, responses from students enrolled in Texas Tech's Personal Financial Planning and Economics divisions indicate that 40 percent of prospective financial advisors are concerned about overall negative perceptions of the financial industry.
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"The next generation of financial professionals has different priorities and skillsets that set them apart," Deena Katz, professor of the Personal Financial Planning division of Texas Tech and chairman of Evensky & Katz/Foldes Financial Wealth Management, says in a statement, adding, "These students represent the future of our industry."
Among respondents, 44 percent are aiming for a professional certification, and 38 percent rank the ability to help others more highly than their compensation package.
In addition, 34 percent said being part of a dynamic industry was more important than money, with just 30 percent weighing in on the side of compensation's importance.
And while technology is high on the industry's list of major hiring incentives, it doesn't rank as highly with prospects, with 50 percent of respondents ranking technological advancements at the bottom of the scale among factors influencing their future career choices.
The next generation is also big on the importance of having a mentor; in fact, they believe a professional mentor is nearly as important as completing necessary coursework (28 percent compared with 31 percent, respectively).
"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," Valerie Brown, Advisor Groups executive chairman, says in a statement. The importance to the next generation of having a career with a higher purpose, says the report, needs to be emphasized.
Brown adds, "While we all know that being a financial advisor is a noble profession, we need to do a better job driving awareness of this in the minds of the next generation. We are excited to leverage the findings from this survey to enhance our own next generation initiatives, and help draw attention to this important priority for our industry."
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
