The financial services industry is facing a talent crisis.
For every eight advisors that retire, only three are trained to replace them. This is particularly concerning in the UK, where 22 percent of the nation’s population will reach retirement age (65) by 2030 – while the current average age of an advisor is close to 60 and 43 percent of them are upward of 55 years old.
With these startling statistics in mind, keeping advisors engaged at multiple levels has become critical, as losing key employees is expensive; it costs firms more than 125 percent of a senior-level annual salary – and potentially much more if it results in lost clients.
However, the industry’s talent outlook doesn’t have to be bleak. Instead of lamenting the loss of a seasoned workforce, financial institutions can tap into a wealth of benefits from their younger generations. After all, the oldest of millennials – now well into their mid-30s – are now entering management and leadership positions.
But the work styles and motivational expectations of next-gen advisors are vastly different than the generations that preceded them. As such, there are a few things UK financial institutions should put into practice (if they haven’t already) to ensure success in hiring and retaining burgeoning superstar advisors.
Learning and Enablement
Regardless of the age group you’re dealing with, it’s essential to provide ongoing training that keeps advisors apprised of your firm’s strategy, priorities, and market evolution. Playbooks that include selling techniques, scripts, tools, tips, agendas, and templates can keep advisors engaged and help them excel in all aspects of their responsibilities. Meanwhile, integrated online training platforms that include training videos, case studies, career development, and more can save advisors valuable time while allowing managers to track their progress.
Next-gen workers want to know how they’re performing at all times. As a result, wealth management firms are increasingly utilizing technology to support their people on the front lines.
Accordingly, the industry is shifting to digital platforms that combine messaging capabilities with incentive compensation systems that enable managers to inform advisors about comp plan changes, territories, and other important matters that can affect their performance. That includes clear communication of targets and goals; real-time insights into remuneration; clear views into referrals, splits, and clawbacks; prompt resolution of disputes; and effective analytics for sales coaching.
Adoption of new technology is always a challenge for large organisations, so it’s vital to make it simple, intuitive, and easy to use. It should also create open lines of communication that give advisors the opportunity to provide feedback and receive it from managers; after all, this newer generation craves mentorship.
Gamification resonates well with next-gen advisors who love winning and gaining recognition for their efforts. We’ve seen from experience how gamifying sales – even with something as simple as a leaderboard – naturally taps into that competitive nature.
You can also use gamification to encourage the performance of administrative tasks, like filling out forms and updating sales data. Offering recognition for these seemingly basic tasks may seem trivial, but it gives younger advisors the motivation to do something they (perhaps rightly) see as a tedious distraction from their higher-level responsibilities. Of course, automating as much of the data-gathering process as possible certainly helps in that regard.
It’s not all about money anymore; the younger workforce values work-life balance and experiential rewards. If you want to engage this generation, consider offering them options for their incentive compensation. They’ll appreciate being able to mix and match their rewards for reaching sales goals.
With a rapidly aging workforce, the most successful financial organisations will be those that adapt to the wants and needs of their next-gen leaders. It may require a cultural shift, but if you can align the behaviours and selling practices of younger advisors with your organizational goals, you’ll meet your targets and keep your clients satisfied.