The financial services workforce is ageing, with baby boomers nearing closer to retirement age and a lack of young talent coming through the ranks. This is creating a significant generational gap within the industry, which can be seen as both a challenge and an opportunity for financial services firms. Almost half of CEOs point to limited availability of key skills as being a serious threat to their growth prospects, and with ongoing regulatory changes and technological developments continuing to shake up the sector, it’s clear that financial services needs to look to the next generation in order to future-proof their businesses.
Enter millennials: the demographic that makes up a quarter of the world’s population and will comprise 50% of the global workforce by 2020. As current financial advisors and employee benefits consultants are aged out of the market in the coming years, it’s this younger workforce that has the potential to help firms deliver on their long-term strategies. They’re digital natives, curious and flexible, yet 21% of them are opposed to working in the financial services sector, according to PwC’s research on millennials in the financial services workplace. So how can you best position your firm to this group and address the generational gap in financial services?
Align your employer branding with the younger generation
It’s important for all businesses to align their business and talent management strategies, and this is particularly true of financial services firms looking to attract the next generation. In order to attract and retain millennials, you need to ensure your strategy is speaking directly to them.
Millennials expect anincreased focus on diversityand inclusion in the modern workplace, yet two-thirds of them believe business leaders only pay ‘lip service’ to this requirement. This generation sees diversity as a tool to boost business and professional performance, as opposed to box-ticking and quota-filling. Does your business have a focus on diversity and inclusion? And how is this being reflected in your employer branding and the messaging you’re putting to market?
Similarly, the younger generation want to work for a business that has a positive impact on society and the environment, as well as one that promotes career development and innovation. Use your job ads, company website and other employer branding collateral to highlight your firm’s focus on workplace education, training and your desire to do good as well as turn a profit and you’re much more likely to attract this demographic.
Focus on what matters most to the demographic
Flexible working is an expectation of the majority of millennial workers, however this isn’t always achievable when you’re just starting out in financial services. While established financial advisors have the experience, knowledge and connections to make remote and flexible working a reality, a new entrant to the financial services workplace may need time to learn and develop before full flexibility is an option. Address this with your applicants, promote the uniqueness of your brand identity, and keep the messaging consistent with that of the audience you expect to attract but remember; the opportunity for career progression, competitive salary and a strong benefits package still matter.
Grow your own talent
An increased focus on training and development not only ticks the millennial requirement for career development, but also helps businesses meet their talent retention challenges head on. There are currently limited opportunities for young people to break into financial services, which is concerning given not only the upcoming skills gap, but also the lack of financial advisors who are prepared to take on lower-value clients.
According to Schroeders, half of all IFAs turned away clients with less than £50,000 investment capital in 2017, with experienced planners more concerned with high net worth individuals. Recent technological advancements with Artificial Intelligence and Machine Learning is providing scope for advice to this sub £50,000 market. Meanwhile, only 6% of 18-34-year-olds took financial advice in 2017, suggesting age and affordability are limiting people who could benefit from seeking financial advice. It could be argued that everyone needs qualified financial advice, with the booming gig economy, record levels of employment and challenging housing market creating new challenges for people looking to plan, save and invest.
In order to meet demand, we need to develop financial advisors from the ground up. Graduate schemes, apprenticeships, mentoring programmes and even workshops and seminars can all help to target, recruit and develop the next generation of consultant. Additionally, formulating a financial planning model of advice to suit this demographic could work to ‘kill two birds with one stone’, effectively providing a market for trainee advisors to learn their trade and gain experience while providing vital services to a generation who can undoubtedly benefit from planning and advice.