Millennials, Financial Services, and You

Millennials now constitute 60% of the workforce in the U.S. and are critical to the future of the financial services industry, but few want to work in our business. In 2016, an Accenture survey reported “recent and upcoming U.S. college graduates indicate only 7% of graduates-to-be are interested in working in banking and capital markets… [1] ”  What about the Millennials already working in financial services? According to a Deloitte survey, “nearly 40 percent of Millennial and the follow-on Gen Z financial services employees (excluding real estate) would prefer to work in the technology industry. [2] ”  

 If almost half of your younger employees want to both leave your company as well as leave the industry altogether, I suggest everyone from C-level executives, boards of directors, branch managers, and you start immediately rethinking your entire corporate structure, your compensation systems, benefits, value proposition, and mission statement because something isn’t working.

In the business world, Millennials are the most idealistic generation ever surveyed. They want their jobs to have some sort of meaning, and they value social responsibility by their employers and themselves more than money. The environment and global climate change is the top social issue for this generation, and they judge their employers on contributions they are making to solve these problems. These young people want to see concrete actions by their employers to ameliorate the environmental damage the company is doing. In fact, they want to participate, even lead the charge to prevent environmental damage by their company. They value diversity, inclusion, gender equality, and community service initiatives on the part of their employers. [3] Work/life balance is more important to this generation than any other, so the long hours customarily demanded in our industry are detrimental to recruitment and retention of this generation. Given all they have been hit with, Millennials as a group want to make major changes in society and business.

Given these beliefs, it’s no surprise Millennials dislike and mistrust our industry. When our industry fell into turmoil in 2008, a number of the most prestigious financial firms, which most thought rock-solid, seemingly collapsed overnight. Senior executives had made questionable decisions, had engaged in questionable business practices, and had breached their fiduciary duty to their shareholders and employees. All of these incidents combined with the mind-numbing bear market hardly burnished our reputation that wasn’t so good before 2008. I’m not sure we have recovered.

Half of your Financial Advisors will walk out of the door and retire over the next ten years. There are approximately 300,000 Financial Advisors in the U.S. How are we going to hire 150,000 new ones? Why even work as a Financial Advisor? A recruiter for a well-known national brokerage firm (now owned by a bank) called me recently and asked if I knew anyone who she could speak with about becoming a Financial Advisor.  “What’s your value proposition,” I asked. She thought a moment then said, “the potential for unlimited income.”  “That’s it?” “Yes.” They are having a hard time recruiting she said. I guess so.

Depending on the source, new Financial Advisors hired and trained for six months while serving their apprenticeship, so they can sit for the FINRA 8 (formerly the Series 7)  in the standard way of learning the minimum then thrown into the shark tank to sink or swim has a failure rate between 80% to 90%. When 90% or more of new Financial Advisor hires that we spend countless amounts of money training get fired or pushed out in year one, maybe the way we hire, train, and compensate new Financial Advisors needs to be revised.

Resources: 

[1] https://talentorganizationblog.accenture.com/financialservices/human-capital-ultimate-guide-to-millennials-in-financial-services#why

[2] https://www2.deloitte.com/us/en/insights/industry/financial-services/aging-workforces-baby-boomers-financial-services.html#endnote-10

[3] https://www2.deloitte.com/us/en/insights/industry/financial-services/diversity-and-inclusion-in-financial-services-leadership.html

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Contributing Writer: Subject Matter Expert Charles McCain