Nearly one-third of financial advisors fall into the 55 to 64 age range, according to a 2014 Cerulli Associates report, suggesting that broker-dealers and custodians are at risk of losing assets as advisors exit the industry. At the same time, the data shows that these aging advisors have been dragging their feet when it comes to succession planning. Young financial advisors may soon experience a job-seeker's market as a result with advisors rushing to bolster their practices.

Here are some tips for young financial advisors as they jump into the industry looking to maximize their success.

Never Stop Learning

The global financial markets are constantly evolving, which means that financial advisors must continuously be learning to keep up-to-speed. For example, a lot of recent economic research has supported the idea of investing passively in low-cost index exchange-traded funds (ETFs) and mutual funds, as they may provide the best long-term returns, while new technologies are constantly emerging that can help optimize client portfolios and improve their long-term risk-adjusted returns.

In addition to research, financial advisors should also keep on top of the latest regulatory trends in order to avoid any problems down the road. Financial advisors should also keep on top of both research and industry trends by subscribing to industry publications, attending conferences, and engaging in other activities designed to improve the value proposition to clients. By keeping on top of these changes, young financial advisors can ensure that they’re positioning themselves best for the future, while helping their aging employers adapt to new and upcoming trends.

Connect Personally With Your Clients

There have never been more options for someone looking for financial advice, with exchange-traded funds making a do-it-yourself approach easier and robo-advisors taking care of the details. In many ways, financial advisors set themselves apart by connecting with clients on a personal level in order to deliver better value over the long run. Young financial advisors shouldn’t forget the importance of relationships in an increasingly digitized society.

The need for personal connections is much more than a nice-to-have feature of any practice. According to MyPrivateBanking Research, by the end of 2020 more than four trillion dollars will be managed by robo-advisors and automated investment platforms worldwide. Young financial advisors will have to grapple with these trends over time much more so than aging advisors will during their remaining few years in the financial advisory business.

Financial advisors may want to consider partnering with robo-advisors to handle the automated aspects of financial planning, while they keep control over the bigger picture and any sudden events that take place. By taking that approach, young advisors can best position themselves by focusing on the areas they can add value rather than trying to compete directly, which could pay dividends down the road as the industry matures.

Invest in Your Professional Growth

Financial advisors may be intimately familiar with the concept of compounding interest when it comes to finances, but the same principles apply to time spent on professional growth. For instance, young advisors should always be reading books and articles, taking online training courses, volunteering with professional organizations, and securing new educational credentials over time in order to continue building their value to both clients and employers. 

In addition to building up their own worth, young advisors should look to give back to others early and often. Mentoring younger financial advisors or students is a great way to keep up on basic knowledge, while helping out others and building a strong rapport. Participating in government requests for information on policy is another great way to give back to society in a way that promotes everyone’s best interests.

The Bottom Line

The aging financial advisory business will soon be creating many job opportunities for young aspiring advisors looking for a spot in the business. When the time comes, these young advisors can set themselves up for success by always learning, maintaining a personal touch, and investing in themselves and others.