According to research by Cerulli, the financial planning industry is expected to lose 25,000 professionals over the next five years because of fewer recruits at wire houses and brokerage firms. Similarly, the CFP Board of Standards says that two-thirds of finance majors did not take the CFP exam.
Other jobs in the financial industry are more appealing to college grads — like in accounting, for example — because salaries can be up to 25% higher. Two other factors:
• many young people are concerned about interacting with an older generation that may not trust them; and
• financial planning business models are perceived as outdated and failing keeping up with technological innovations like social media.
Not stated: Many college grads with significant loans may be reluctant to enter professions where a high percentage of compensation is commission-based.
So financial planning professionals, plan advisors, brokerage firms and providers alike are facing a thinner pool of recruits. They will have to either train people themselves or not be able to expand their businesses as fast as they would like as opportunities arise.
What can the industry do to solve this problem? Share your thoughts in the comment box below.
