By 2024, experts predict that business for the financial planning sector will grow by up to 30%. This compounds the increasing financial advisor shortage, which ranks second as one of the hardest roles to fill in the nation. While numerous other industries are also struggling with finding qualified job candidates, financial planning organizations have a few unique factors working against them that make the shortage more prominent.
- An aging industry. It’s no secret that many industries will have a skilled labor gap to contend with as more baby boomers reach retirement age. This an even bigger concern for the financial planning sector as there are more CFPs over the age of 70 than under the age of 30. In fact, only 11% of CFPs are under the age of 35. With the average age of CFPs hovering around 60, the industry is on the cusp of a massive loss of talent due to retirement.
- Difficulty entering the industry. Individuals looking to become a financial advisor have numerous hurdles in front of them to do so. They have to obtain licensing, establish new clients, earn referrals, and cope with a significant learning curve all while financing the venture out of pocket.
- Unclear career trajectory. Being a financial advisor doesn’t have ladder rungs to climb like many other industries. Without stability and distinct growth opportunities, many potential advisors opt for other careers.
- Sales culture. Millennials represent the biggest portion of working adults, and this is a challenge for the financial planning industry. Millennials eschew sales culture and don’t thrive in the peer-to-peer sales environment many financial firms embrace. Not only that, it’s unrealistic in today’s economy for millennials to tap into their friends and family as potential sales sources because many of their peers haven’t accrued enough wealth to justify needing a financial advisor.
- Struggling to succeed. Many financial advisors are independent consultants without a mentor to guide them. There is also a notable dearth of training materials to help new advisors train in their field, which makes it difficult to succeed. Compounding the problem, as a significant portion of the industry approaches retirement, there will be even fewer mentorship opportunities.
As Florida financial advising companies continue to contend with staffing challenges, they need to be mindful of their risks as well. Contact the experts at MMA Florida to learn how we can help your finance business keep risk in check.