05.09.19

Seeking Younger Talent, Advisors Can Underscore Societal Impact

by: Rich Blake

Around the nation, financial firms continue to report difficulties finding qualified employees. Even in looser labor markets, banks and credit unions have found it hard to recruit advisors. Similar to manufacturing, the finance industry faces demographic headwinds.

And there's yet another challenge confronting advisory teams out for new blood: how to pitch the attributes of a profession that may not seem all that appealing to today’s youth, specifically those twentysomethings just starting their careers, and who are guided by different priorities, sensibilities — and skepticisms.

"We need to interview roughly two dozen candidates for every one that we wind up hiring," said Ron Moskala, an Amherst, New York-based senior vice president at MassMutual New York State. An industry veteran of nearly two decades, Moskala helps oversee advisor recruiting efforts in the Buffalo area.

The best interviews usually are a two-way discovery process, he explained, noting how some candidates fire off as many questions as they get asked. Dismiss them as hopelessly altruistic if you must, but younger professionals literally are asking prospective employers, how are we making the world a better place?

“Millennials have been unfairly labeled as a spoiled and entitled generation that’s only interested in taking selfies and communicating with emojis,” said Janki Patel, consultant, The Ensemble Practice, in a guest blog on Michael Kitces’ website. “Instead, Millennials can actually be quite driven and passionate, and they desperately want their careers to matter. They care less about perks and benefits, and more about a company’s mission.”

In other words, Patel stressed, today’s young people can make terrific financial advisors. But firms, when recruiting them, need to be sure to emphasize what it is, exactly, the candidate will be doing to serve the community, and why it matters.

Moskala knows this all too well, being on the front lines of an industrywide battle to enlist the next generation of advisors. This talent crop needs to be cultivated not only to take over for those advisors who are set to retire, but because these younger reps are also seen as crucial connection to the next generation of clients.

Although the term millennial tends to get overused (by older people) as a catch-all for anyone in their mid-30s or younger, there are, according to a range of academic researchers, two closely associated, but distinct, segments of the population: Generation Y, or Gen Y (born between 1980 and 1996) and Gen Z (born after 1996). Studies have shown the youngest members of Y and the oldest of Z — let's call them 22-year-olds just out of college — tend to exhibit several noteworthy characteristics in the context of finance.

In a 2017 survey of high school juniors and seniors, Fiserv drilled down into Gen Z’s attitudes about financial institutions.

This demographic appears to be keenly interested in financial security and saving, as they’ve had a decent amount of financial education relative to prior generations. And they have watched older siblings struggle with debt. Most of these respondents, including the heaviest technology users, said that they see the importance of human relationships to solve complex problems.

In addition to a heightened sense of social awareness, here’s one more common bond tethering Gen Y to Gen Z: putting a premium on quality time — or put another way, valuing experiences over possessions. Another intangible common to young people finding their professions: a sense of being part of something bigger than themselves.

About five years ago, MassMutual embarked on a dedicated push to reach more millennials. The Springfield, Massachusetts-based insurer began by launching a local pilot program called the "Society of Grownups." These events mixed group socializing (food, drink) with financial planning discussions. The program has since expanded with the creation of “The Establishment” which is a regularly scheduled, part wine tasting, part financial literacy seminar. First established in Williamsville, New York, the series has since spread to Oklahoma City and Shelton, Connecticut, helping to set MassMutual apart in terms of fostering a meaningful youth movement.

To better understand how his firm has focused its resources on identifying new advisor talent, we spoke with Moskala, a 46-year-old Gen Xer, about his experiences recruiting younger people.

Where do you generally look for new talent?

Moskala: Our pipeline can be divided up into thirds. One third, college interns, or recent college graduates. One third come from other firms. And as for the final third, I would describe this segment as change-of-career folks; people who are changing course and making what is for them a very big leap out of their comfort zones. We need to interview roughly 25 candidates to find one strong candidate.

What seems to motivate younger people these days?

Moskala: I think in some cases the younger generation is showing some similarities to older generations in that they are looking for more stability, more security. But one of the big things we commonly find talking to Gen Y and Gen Z is their interest in having a profession that contributes to their communities, gaining the sense that they are doing right by society. And sometimes I think they need to be reminded that, in terms of societal impact, it doesn't get too much more important than helping someone build an adequate retirement nest egg. I think as an industry we can do more to get that message across. Okay, so you want to help society have an impact — then here, go help people secure their retirements, help them put kids through college, be there for them in times of financial stress. This is a job that involves impacting real people with real issues.

How big of a priority is it right now to find the next generation of advisors?

Moskala: Our company has always put a premium on investing in leadership development, technology and training. That's something we will continue to focus on — coaching, mentoring. First, we need people to learn the basics of the industry but at the same time we need to demonstrate our value proposition. That involves conveying to them that this is a rewarding profession and also to teach them how to be successful.

What is the most important trait of a successful advisor?

Moskala: The ability to earn trust. Which means, deep down, being genuine, and being able to communicate that without necessarily saying 'hey you can trust me' — you know, it’s hard to put your finger right on it. Now take someone in their early 20s, just coming of age, finding out who they are. It’s tough to take a long, hard look at yourself and ask, do I have what it takes? Can I talk to people? Do people trust me? For some people, it’s a natural fit more than others, but one thing about at least giving it a shot is that no matter if it works out, you end up learning a lot about yourself.

What can hold back those candidates who don’t work out?

Moskala: For some people, it’s just not being able to come up to speed on the details and terms of finance — insurance, mutual funds, expense ratios, equities, fixed income, it can be a lot to comprehend the more you get into the weeds. The “stereotypical millennial” is someone who is always on their phone, right? Texting, instead of actually speaking. And this is a people business. Let’s face it: For some younger people, face-to-face sales and networking can simply be outside their comfort zone. But I’ve watched young people give it their best short, and for them it was at least a learning experience.

What are some other ways the advisory industry can appeal to the new breed?

Moskala: Younger employees often desire more autonomy and some flexible time to work from home. That can also mean making sure you have the technology to be able to do that. So, there is that emphasis on a quality of life, not being chained to the office, and we are always encouraging people to get out of the office and get into the community. I think similarly to many people, though, regardless of age, there’s always going to be those people who want to feel like whatever it is they are doing, that they are least growing, personally and professionally, and not stagnating. That sense of personal growth is common to a lot of generations including the younger people we see.