Only 5 percent of financial advisors are younger than 30 years old, according to a new study by Pershing, suggesting that the financial advisory industry is aging.

"The industry is facing the real possibility that investors who seek financial advice will not be able to find someone qualified to give it to them," said Kim Dellarocca, head of practice management and director of segment marketing at Pershing.

Pershing's study, Regeneration: How Gen Y Could Revitalize the Industry and Bring New Life to Your Firm, found that while 96 percent of students had heard of financial advisors, just 7 percent were actually interested in pursuing it as a career.

"Gen Y aren't engaged in the financial advisory business because we haven't engaged them," said Craig Pfeiffer, CEO of Advisor Ahead, a financial advisor development firm that works with Pershing.

The financial industry will need to add 237,000 advisors within the next 10 years, but 11 years are needed to train the next generation to take over from aging advisors who are nearing retirement today.

"Financial advisory founders and companies haven't done a great job at succession planning beyond basic techniques like book valuations. Succession planning needs to be about the leadership and mentorship of people who come behind you. Otherwise, you leave your clients, their heirs and associates at risk," said Dellarocca at the W Hotel in New York, where Pershing held a breakfast press briefing.

"By not engaging them, financial advisors could lose Gen Y as clients in the future," Dellarocca told Financial Advisor magazine.

Gen Y'ers may very well give aging financial advisors a run for their money.  "Just giving and implementing a financial plan for them isn't enough. They want a hand in developing their portfolio and understanding their options," said Pfeiffer.

That may be because they saw their parents lose sleep over the financial crisis and subsequent collapse. "Gen Y'ers were in high school in 2008. They attended college during an incredibly disruptive broken change of tradition and all they heard was that last year's graduates hadn't gotten jobs," Pfeiffer said.

Pershing provides practice management resources to help their clients market to Gen Y, also called Millennials. Unlike the baby boom generation, specifically described as people born between 1946 and 1964, Gen Y has no precise birth dates when it starts and ends, although commentators usually quote a range from the early 1980s to the beginning 2000s.
Pershing’s program includes value proposition guidance, job descriptions, internship program templates, training program guidelines and marketing support.

"What makes Millennials well suited for financial services is that they are collaborative, and financial advisors are now working in a team setting. That's how Generation Y attended school. They are technologically adept, having grown up with intuitive applications and navigation adoptions," said Pfeiffer.

Although many Gen Y'ers have accumulated a significant amount of debt, including student loans, they need advice regarding budgeting or debt repayment. There is a silver lining for financial advisors who will invest time with this population because they will be inheritors of the upcoming intergenerational wealth transfer.

"Millennials' lives have been scheduled and structured, for them thus they have an appetite for structure and structured portfolios. They also expect structure from their employers and the advisor client relationship as well," Pfeiffer told