While the project to expand the Keystone XL oil pipeline is mired in years-long political and regulatory delays, one company continues to grow a pipeline to deliver fresh faces to the financial planning industry.
Since its launch in 2010, TD Ameritrade Institutional NextGen focus has expanded and grown a three-pronged program to bring much-needed new talent to RIAs through scholarships, internships, grants and tools for advisors and students, including a career exchange website.
The Bureau of Labor Statistics predicts that financial planning jobs will increase by 27 percent through 2022, tripling the overall U.S. job growth rate. At the same time, recent data from the U.S. Department of Education shows that around 700 students graduated with financial planning degrees from around 90 schools in 2013, not nearly enough to meet the demand for new talent.
“When we take a look at the industry, we see a pending advisor shortage,” says Kate Healy, managing director in charge of marketing for TD Ameritrade Institutional. “Right now, only six percent of advisors are under age 30.”
Combined with a graying contingent of financial professionals – the average age of an advisor is currently 52 years old – today’s number of financial planning graduates doesn’t match the predicted outflow of talent.
That’s why TD Ameritrade has opened the spigot, says Healy, promising a $2 million investment over the next decade to raise awareness of the career prospects for financial planners.
“We’re looking to do anything we can to elevate this profession,” Healy says. “What we’ve heard from advisors is, of course, that they recognize the problem and want to do something to address it, but don’t necessarily know how to begin. We’re looking to make it easier for them.”
For the past three years, TD Ameritrade has awarded the NextGen Financial Planning Scholarships, growing the program support from ten $5,000 scholarships in 2013 to 12 this year.
To address the dearth of women and minorities in the advising industry, the company is increasing its focus on students from underserved and under-represented groups. The new awards will be earmarked for African Americans, Latinos, Asian-Americans, or women.
“We recognize that there is still not enough diversity,” Healy says. “Research says that 40 percent of millennials are ethnically diverse, significantly more than previous generations, so we want to make sure advisors are creating diverse work cultures.”
In general, the scholarships are awarded to college freshmen, sophomores or juniors pursuing financial planning degrees at a four-year university. Since 2013, the program has given a total 34 awards.
This year, because the scholarship judging panel had two ties in the selection process, the company decided to grant two extra scholarships, for a total of 14.
But the company’s outreach to the next generation of planners doesn’t stop at tuition support. TD Ameritrade’s RIA Intern Network is an online community connecting students with advisors from more than 600 firms, allowing them the opportunity to use TD Ameritrade professional development resources to create their own internship programs.
“These are small businesses and many of them didn’t know how to create an internship program,” Healy says. “We created a series of guidebooks on how to create, source and host internship programs.”
While most internship-seeking finance students are guided to internships at brokerages and wirehouses, TD Ameritrade’s program is one of the few to offer experience at an RIA, the fastest-growing sector of the financial planning industry — but that introduced a host of challenges, Healy says.
“We found that our students had peers who went to large firms with well-established internships involving classes of 10, 20 or more people,” Kate Healy says. “We wanted to create more of a sense of community and to give our advisors' interns more tools and resources, so we started doing webcasts for interns and advisors during the summer months, bringing in subject matter experts from the industry. We then expanded on that with a dedicated, closed LinkedIn group, so interns and advisors have access to a network where they can share best practices and talk to each other.”
TD Ameritrade’s internship program is unusual in that instead of providing central coordination for the interns, RIAs are free to tailor a program specific to their firm’s needs or the student’s interests.
“Historically, RIAs have been more siloed, there’s little centralization to their efforts,” Healy says. “We’re trying to bring a little bit of a central effort to make it easier for them. Each RIA forms their own relationships with universities or starts an internship program, and we give them some support.”
That support comes in the form of guidance on how to construct an effective internship, and a website to help students and firms find one another.
In 2014, TD Ameritrade extended its pipeline again with the RIA NextGen Career Exchange, a free site focused on jobs and internships in the RIA industry.
“It’s a free database where advisors can post jobs and interns can post resumes,” Healy says. “They can search and find available opportunities or candidates. Right now we have 500 participants in the exchange.”
In addition to the programs, a larger cohort of financial planning students attend TD Ameritrade’s National LINC, an annual advisor conference, to network and search for jobs. Since 2010, the company has invited students to attend the RIA conference, covering travel and hotel expenses for more than 150 students over the past six years.
“The conference overall has grown to over 3,000 people,” Healy says. “We bring students in for two reasons: one, it gives students experience with the profession, they meet advisors and form connections. Two, it does a lot towards giving advisors experience with the students. Five to ten years ago, advisors were afraid of millennials because they were so young and different. It’s as much a learning experience for advisors as it is for students.”
The company is also addressing the paucity of financial planning programs at the university level. In 2010, it launched a $50,000 grant program for schools expanding or enhancing their financial planning degree program. In 2014, TD Ameritrade added a second $25,000 grant for schools launching a new degree program.
“The schools are overjoyed,” Healy says. “This is a relatively new profession, the curricula are still evolving for these programs, so the schools themselves are playing catch-up. When colleges learn about job opportunities growing in a specific profession, however, they take notice. The growth of these programs is going to explode.”
This year, the University of North Texas received the $50,000 grant, while Temple University will use the $25,000 to create a new undergraduate degree in financial planning and to start a student chapter of the Financial Planning Association.
In addition, this year TD Ameritrade announced a strategic partnership with Texas A&M University, a 2014 recipient of the $25,000 grant. The company has agreed to become a multi-year sponsor of the new program, supporting a financial planning bachelor’s degree program, a post-graduate extended learning program leading to the CFP exam, and a new financial planning minor.