A looming shortage of new registered investment advisors is being made worse because most firms want experienced advisors with an existing client base and many job seekers don’t understand the job of RIA, says new research from TD Ameritrade Institutional.

Although most RIA firms are hiring, they focus recruiting on advisors with existing clients, but that can exclude high-potential students, career-changers and professionals from diverse backgrounds, TD said in a press release.

Also, awareness of the RIA profession is low outside the industry, limiting the applicant pool. Fewer than half of potential job seekers surveyed knew what an RIA is, but their level of interest nearly doubled after learning more about the career, TD said.

“Much needs to be done to make the financial planning profession more attractive and sustainable, and our first job is to make it more visible,” said Kate Healy, managing director of Generation Next at TD Ameritrade Institutional. “With so many advisors expected to retire in the next decade, combined with the rising demand for financial advice, our industry needs to expand its access to talent if it hopes to be sustainable and serve future generations.”

Among the firms surveyed, TD found 57% of RIAs hired new associates in the past year and 56% offer internships. When looking for new hires, 36% rely mostly on referrals when hiring and 7% use recruiting and LinkedIn. When deciding whether to make a job offer, advisors look for applicants who enjoy working with people (75%), self-confidence (71%), clear communication (70%) and entrepreneurial 
spirit (66%).

But students and career-changers often are unfamiliar with, or have misinformation about, the RIA profession and that makes it difficult for firms to recruit them, the research said.

“Our findings reinforce the urgent need for our industry to take action,” said Healy. “Working together, we need to cast a wider net to attract the next wave of talent. We need to step up our game at colleges and universities and even high schools.”

TD Ameritrade Institutional used an independent research firm earlier this year to survey more than 2,000 advisors, students, career-changers and university program directors to learn more about what current job seekers look for in a career and the recruiting headwinds RIA firms may face. TD provides custodial services to more than 7,000 RIA firms.

TD said it intends to use the results of the research to develop a program that will help RIAs attract young professionals and expand the pool of talent.

Healy will speak at the FPA Annual Conference Thursday, October 17, at 9 a.m. about the results as part of a presentation “Seeing is Believing: Why Independent Advisers Need to Raise Their Profile to Connect with Generation Next.”