Low awareness and misinformation regarding the financial planning profession are the key reasons causing a shortage of talent in RIAs today, says a study by TD Ameritrade Institutional.
The study, which polled over 2,000 advisers, students, career-changers and university programme directors, revealed that 37% of the students and 44% of the career-changers were aware of the RIA profession.
However, 63% in the student group and 64% in the career-changer group became interested after gaining more knowledge about the profession.
Moreover, the bulk of recruiting initiatives were found to be focused on advisers with an existing client base, thereby excluding career-changers, students, as well as professionals across various backgrounds.
Misperception and low familiarity were also seen as impediments in this regard, with 37% of the undergrads preferring to do something else and 34% of the career-changers concerned regarding unsteady income.
Also, 46% of the career-changers were found to be worried regarding starting over or losing tenure.
TD Ameritrade Institutional managing director of Generation Next Kate Healy said: “Much needs to be done to make the financial planning profession more attractive and sustainable, and our first job is to make it more visible.
“With so many advisers expected to retire in the next decade, combined with the rising demand for financial advice, our industry needs to expand its access to talent if it hopes to be sustainable and serve future generations.”