The next two decades are set to see a sweeping shift in American wealth, as it transfers not only from baby boomers to millennials but increasingly from men to women. By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers currently possess according to a study by McKinsey. For RIAs nationwide, now is the time to develop the next-generation and female talent who will serve as financial advisors for this new landscape of wealth.

It’s no secret the financial services industry has traditionally been dominated by older men, partly because American wealth, in general, has historically been controlled by this demographic. Currently, men are the key financial decision-makers in two-thirds of affluent households. However, the landscape is already shifting. Compared with five years ago, 30% more married women are making financial and investment decisions. Just as older male clients have typically felt more comfortable with older male financial advisors, younger and female clients will likely feel they can relate better to younger and female advisors.

Personal Perspective
I serve as the president of a Los Angeles-based independent RIA that was founded in 2007 and has $2.2 billion in assets under management. Over the last several years, we’ve built a team composed largely of next-gen advisors who drive our growth and innovation.

Speaking from personal experience, I started as a 20-year-old college intern at our firm, working my way up from an analyst role to become president last year at age 27. My rapid progression was only possible because our managing partners have created a culture that emphasizes recruiting young advisors, putting them in positions of responsibility early on, and encouraging high achievement.

40% of our advisors are under the age of 40 and 50% are female. Compare these statistics to a recent survey conducted by the Certified Financial Planner Board of Standards, Inc., which indicates that 72.2% of CFP professionals nationwide are age 40 or older and 76.8% are male.

Addressing The Issue
Why are there so few next-gen advisors in the industry? For the most part, we don’t believe it’s because of a barrier to entry. Plenty of large banks and brokerage firms have recruiting programs targeting young advisors. But there seems to be a barrier to success because not many of those new trainees become successful long-term advisors.

Perhaps that’s due in part to a lack of mentorship and collaboration. Another issue at larger firms is the high sales expectations placed on next-gen advisors, who are almost destined to fail when judged by such harsh measures. From the outside looking in, it appears that many of the training programs offered by bigger firms are prime examples of what not to do. Instead, RIAs should focus on identifying next-gen advisors with great potential and surrounding them with extensive tools, resources and support.

That is not to say sales goals shouldn’t be emphasized with younger advisors, just that equal emphasis should be placed on providing one-on-one coaching and training to help them reach those objectives. Additionally, many larger firms look only at the end result, whereas our firm tends to provide next-gen advisors with a much longer runway if we see that they’re showing great dedication, but the results aren’t there yet.

It’s also important to offer opportunities for younger advisors to add value beyond bottom-line sales, such as by partnering them with existing teams to help service current clients. In this way, they can assist with compiling financial planning information and play a supporting role in addition to focusing on inbound sales.

Within the demographic of next-gen advisors, RIAs should emphasize identifying female talent specifically. Over the years, there has been a fundamental lack of education for young women about opportunities in financial services and how rewarding this industry could be for them. Fortunately, that’s starting to change and independent firms like ours recognize not only that women can make great financial advisors, but how important it is to diversify staff with a strong female presence.

Recruitment And Retention
When recruiting, we lead with our culture, which is based on teamwork, fun, authenticity and client service. Each of those aspects are exciting and attractive to young people, opening many doors for us with highly qualified candidates.

But it’s one thing to recruit promising next-gen and female talent and another thing entirely to retain it, so RIAs need to encourage empowerment. That typically isn’t happening at larger firms, where young advisors often face pigeonholing and a hard climb up the ladder. The industry would benefit from a flatter organizational structure and more prevalent mindset that if a young advisor wants something, they should be able to work hard and go get it.

Our managing partners have created like comparisons for next-gen and female talent to come in and strive to emulate that success. It’s very appealing and motivating when there are obvious examples in the firm of successful advisors who are about the same age as the people we’re recruiting.

That’s especially true as RIAs now compete more and more with tech fields, which are perceived by many new college graduates to be cooler and edgier than financial services. You really need to give young professionals more empowerment and flexibility, since that’s the only way to attract top talent these days.

The retention of that talent is also based on listening to what they want and providing a platform for them to grow into it. Our perspective is if you have good ideas for one area of our business, then you should be more involved in that area and help us make those decisions.

Advice To Others
To other firms that seek to bring in more next-gen and female talent but don’t know where to start, I’d recommend focusing on your culture. A couple of steps we took early on were to institute Summer Fridays (our office closes at 2:30 pm in the summer) and relaxing the dress code. Both represent minor changes that can make a major impact by loosening up the office atmosphere and creating a more fun culture.

As far as broader concepts, trust the young people who you bring in. Give them decision-making power but also mentorship. Steer them in the right direction and have faith that they’ll make good choices. Adopting this approach is instrumental in helping next-gen and female advisors build the confidence and skills needed to succeed.

Matt Granski is a partner at Miracle Mile Advisors and serves as the firm’s president.