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Resolving RIA Talent Shortage Starts with Student Recruiting, Survey Finds

A first-ever survey of college administrators finds that resolving the looming RIA talent shortage starts with “grassroots awareness efforts” aimed at recruiting more students, particularly women and minorities, into the industry.

Released as part of its 4th Advocacy Leadership Summit in Washington DC, the TD Ameritrade Institutional 2017 Financial Planning Program Director Survey finds that independent RIAs are largely invisible on campus, which is keeping them from hiring top talent.

TD Ameritrade reached out to all of the 105 four-year colleges and universities with undergraduate financial planning programs registered with the CFP Board to gain a better understanding of what the RIA industry can do to address the lack of young professionals and overall talent shortage.

According to the results, one possible reason is that financial planning as an undergraduate degree is still fairly young at most colleges and universities. Program directors report that the average age of these programs is only 10 years old and the average program has 66 enrolled students and six faculty members, which typically includes two women, one minority and two financial advisors.

Enrollment is expected to climb, however. The survey found that 90% of the responding schools expect enrollment in financial planning programs to grow over the next five years.

Lack of Woman and Minorities

Even though minorities and women are currently underrepresented, program directors also believe their ranks will rise. Currently, just 36% of financial planning students are women and only 31% are minorities.

Program directors believe the main reason there are not more women or minorities in financial planning programs is because these groups are less likely to consider the profession is a viable career option.

Those who do enroll, however, find they are in high demand in the job market. The survey found that women and minorities receive job offers upon graduation at slightly higher rates than the overall population of financial planning graduates. The findings show that 77% of women and 75% of minorities land financial planning jobs within six months of graduation, compared to 73% of the overall total.

Channeling the RIA Channel 

Though the RIA channel is discussed within the context of the financial planning curriculum, program directors say that independent advisors can help their cause by increasing their engagement with students.

“The war for talent starts at the undergraduate level. To win, RIAs need to get out in front of the next generation on campus and make themselves seen,” says Kate Healy, managing director, Generation Next, TD Ameritrade Institutional.

Program directors say the most effective thing RIAs can do to increase awareness and build their talent pipeline is hire more interns. In addition, they suggest that more RIAs should participate in on-campus career days and become guest lecturers, or even adjunct professors. The findings show that 70% of programs surveyed currently teach students about RIAs, largely by bringing in advisors as guest lecturers and by talking about the independent RIAs as a channel option.

TD Ameritrade engaged True North to conduct the survey, which was fielded via email and telephone in September 2017.

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