| NEW YORK, July 25
NEW YORK, July 25 Small U.S. brokerages are
beefing up their training and presence on campuses to woo future
employees as the industry faces a mass exodus of retiring
financial advisers over the next decade.
Some 25,000 brokers and brokerage firm advisers will retire
over the next three years, a trend that is expected to continue
for more than 10 years, according to research firm Cerulli
Associates. Within 10 years, roughly one-third of U.S. financial
advisers will retire, it estimated.
Not enough young financial advisers are available to take
their place. Only 5 percent of the 308,000 brokers and advisers
at U.S. firms are younger than 30 years old, according to
"The issue isn't that the seniors are leaving. It's that the
industry doesn't have many freshmen or sophomores to replace
them," said Craig Pfeiffer, founder and chief executive of
independent training program Advisors Ahead.
Training can be costly: about $250,000 to recruit and train
a rookie adviser in a four-year program that only one out of
four will complete, Andre Cappon, president of research firm CBM
Though traditional brokerage firms like Morgan Stanley & Co
and Wells Fargo & Co can recruit more rookie
advisers because of their size, these so-called wirehouse firms
are not expanding their training programs the way small firms
are. Larger firms can be more successful at hiring established
advisers and have been fine-tuning their training programs to
focus on certain niches.
Morgan Stanley does not plan to increase the 1,000 trainees
it annually accepts into its program in the near future,
spokeswoman Christine Jockle said. Wells Fargo, which adds 600
to 900 participants per year, is trending toward the lower end
of that range to "focus on quality," Tom Allen, learning and
development manager, said.
Smaller firms cannot easily poach experienced financial
advisers from bigger firms, so they use training programs to
build up their workforce.
"(Our increased training) stems from the need for building
and investing in talent in the near future," said Kimberly
Theakan, director of talent acquisition and integration for
Robert Baird's private wealth management business. Baird is
accelerating recruitment on college campuses and helping to
develop a wealth management and financial planning track at the
University of Wisconsin-Madison's business school.
Regional brokerage Edward D. Jones Investments has 400
recent college graduates in its current group of 3,000 trainees.
The company, which spends $250,000 on each new adviser over two
years, plans on increasing enrollment every year to accommodate
growing customer demand for advisory services, said John Rahal,
principal and financial adviser for talent acquisition at the
Raymond James Financial will triple the 100
participants annually enrolled in its Advisor Mastery Program
over the next three to five years, said Tash Elwyn, president of
the firm's private client group. He said he intends to use the
program to replace the company's retiring financial advisers on
a one-to-one basis.
(Reporting by Michael Leibel; editing by Linda Stern and