Take any 10 financial advisors today, and there’s a good chance that four of them will retire over the next decade—that’s more than 100,000 advisors out of the workforce within 10 years.

For the industry to continue to thrive, we need to actively look beyond fresh college graduates. With roughly140 CFP-registered financial planning programs in the country, these programs are not producing enough talent to sustain the industry. We need to cast a wider net.

Future advisors—what we call Generation Next—needs to include younger generations, but also anyone who isn’t in the field already. This includes nontraditional graduates, people coming back into the workforce after caring for parents or children, veterans and other career-changers from a wide array of backgrounds and experiences.

Sharing Perspectives And Experience

A common joke is that hiring younger workers means always having in-house tech support. But this stereotype sidesteps the broad capabilities and potential that these workers present, as well as the other experiences and abilities Generation Next can bring.

We need more advisors not only to replace those who will be retiring, but also to help a growing population manage its money wisely. We don’t need to replace advisors in the middle of their careers; we need to attract more new ones who can work with and learn from older generations. We don’t need to hire fewer men; we need to hire more women. Weeding out current perspectives isn’t the goal; having a broader range of perspectives and encouraging inter-generational collaboration and overall inclusion is.

Recruiting advisors with different backgrounds presents a tremendous learning opportunity for new and existing advisors alike. The wisdom older advisors have earned through experience provides an invaluable perspective. Pairing new voices with existing ones means those with more experience can teach nuances to newer advisors like how to navigate tricky situations, which ultimately strengthens the firm as a whole. Simultaneously, new hires can bring outside experience that enhances the firm’s offerings and mission, as well as potential new clients.

Building The Firm Of Tomorrow Today

In addition to making sure there are enough financial advisors, we need to make sure there are enough clients to keep our profession healthy.

Many of the advisors I talk to recognize this need but are comfortable with the status quo. When these advisors near retirement, they see little value in changing the way they’ve always done things to invest in a future they won’t have to worry about managing. According to the 2018 FA Insight study Growth By Design, 90% of RIAs have 50% of their clients in distribution mode, meaning a firm will have limited growth potential unless it is also growing by adding younger clients, and the services they need. In 2017, firms that put greater focus on the under-55 market added clients at double the rate of firms that did not, as well as seeing significantly higher revenue and AUM growth compared to firms with an older client base.

The new generation of investors on the horizon will need financial advisors for decades to come. Baby boomers are set to pass $68 billion to their children, women are expected to control $22 billion in assets by 2020, black buying power is expected to hit $1.5 trillion by 2021 and Latino purchasing power is forecasted to top $1.7 trillion by 2020. For a firm to grow and remain profitable, it will be crucial to attract the next generation of advisors who can tap into this new clientele while simultaneously maintaining relationships with current clients.

An advisor who’s retiring and is looking to sell their firm should be aware that buyers consider current profitability, future solvency and growth potential. It’s necessary for advisors to look to the future not only to provide stable services to existing clients but also to build out a succession plan that sets their firm up for growth.

Demographic Shift

American demographics have changed dramatically since the oldest generation entered the workforce, and the U.S. is projected to be a "minority majority" country by 2045. Recruiting more advisors from different backgrounds will become increasingly important to help serve this growing next generation of investors.

Generation Next advisors from different backgrounds allow different views on finances, lifestyles and cultural norms. Younger workers, for example, acutely understand the challenges of enormous student debt. Women with children are more likely to have a fuller comprehension of the difficulties of a mother re-entering the workforce. People of different backgrounds may be put at ease seeing someone who looks and sounds like them sitting at the table. In some cultures, for example, money matters are a family affair, while in others, decision-making is primarily the responsibility of one person.

These perspectives will help add to an organization’s capabilities, bringing in new client segments while continuing to grow in traditional markets. It makes strong business sense to start expanding the knowledge, experiences and cultural capabilities that your employees have. This goes beyond being able to understand how to use social media as a marketing tool, and instead means incorporating Generation Next into the core of your company.

As we lose those 100,000 advisors, adding new ones—especially those with an array of different backgrounds and experiences—is vital. Recruiting Generation Next will help ensure that the financial planning profession remains strong for years to come.

Kate Healy is managing director of Generation Next, focused on advocacy for sustainability issues facing the RIA industry. Healy leads TD Ameritrade Institutional's NextGen and Women's Leadership Initiatives. She is a member of the company’s Diversity & Inclusion committee.