Independent advisors need to lead the recruiting and training of a new generation of wealth managers, according Jeff Motske, president and CEO of Trilogy Financial, $3 billion hybrid RIA based in Huntington Beach, Ca.
“The public wants independent advisors and the industry is moving in that direction,” he said. “Clients are already asking older advisors about who is going to advise them when the advisor retires. Older clients want someone who can see their family through the estate transition process. A younger planner gives clients confidence that someone will be there to help them through their entire life and afterward.”
Most advisors are helping their clients navigate the impending $30 trillion wealth transfer from baby boomers to their heirs, said Motske, but may be ill-prepared for the massive wealth transition within their own industry.
Approximately $6 trillion in AUM will move from retiring advisors to younger practitioners over the next 10 years, said Motske, and more than one-third of the advisor workforce will leave the business. So far, the emerging academic financial planning programs are not producing enough graduates to fill the need for advisors, so firms will have to cast a wider net to find their next generation of workers, said Motske.
“If we don’t help new advisors in this marketplace and bring them up, there’s going to be a huge gap out there,” he said. “If independent advisors won’t train this new generation, someone else will do it, whether wirehouses, insurance companies or tech companies. We have an obligation to get young advisors trained properly and get their feet underneath them.”
Understanding The Audience
Motske said that wealth management firms should realize that younger audiences view them with skepticism. Many Americans still identify the financial industry with the 2008 global financial crisis. Media have exacerbated the impact of the crisis by continuing to paint the industry in a poor light, and good advisors end up being grouped in with bad actors.
“Like many advisors, one of our key values in our firm is that we’re client centered,” he said. “If you use that language with someone in the interview process who is brand new to the profession, it resonates with them, especially young people. If you have authenticity with young people, it helps to change their mindset.”
But the bad press is exacerbated by the financial industry’s general conservatism. As a rule, established financial companies, including advisors, tend to be resistant to change, he says.
Young people today are more likely to demand changes and more flexibility when it comes to workspace, schedules and lifestyles, benefits that the industry may not be willing to offer them, said Motske.
“This generation wants to help people, they’re very service oriented, and they want to have a purpose and meaning,” he said. “Advisors should be able to appeal to that characteristic. We take young people and sit them in client meetings so that they can understand the meaning of financial planning in people’s lives. If they see the client journey face to face, it can be a motivating, meaningful factor for them.”