Changing of the guard: Hiring a new generation of advisors

Prudential pairs new recruits with senior mentors to retain and expand its business as the industry grapples with a graying workforce.

By Theresa Miller

September 11, 2019

Mr. Marsh brought each of his high school economics students a daily copy of The New York Times. He taught them about trading in the stock market and led his Plainfield, New Jersey, students through mock investing competitions.

Syeedah Smith sat in class soaking it all up. When she graduated in 1998, she knew she was destined for a career in business finance. She achieved that dream and then some, working her way up the corporate ladder as a New York City financial analyst, until she decided two years ago to become a financial professional at Prudential.

For Smith, economics was all new in high school. 'At home, we didn't talk about money. We didn't talk about saving or investing,' Smith says, adding that her growing understanding of the economy and its impact on household finances motivated her toward a financial career. 'My mom and dad didn't know how to prepare for the future or plan for retirement. They went to work. They made ends meet.'

Building a new generation of advisors

Smith's background is part of what motivated her to join Prudential's Gemini Mentoring Program, designed to attract young professionals to the advisory business. Gemini establishes a formal business partnership between a top financial professional and a newly appointed recruit and provides career development through a mentoring relationship-working to create a new generation of advisors. She's partnering with George Barnes in Newark, New Jersey, who joined the company in 1988 and began working in the field two years later.

There are 247 Gemini partnerships in the increasingly popular program, with 116 senior advisors currently applying to join Gemini, up 17% from a year ago. And for good reason: New program participants generate 10% more business than other new hires.

At 39, Smith is practically a youngster in an industry where advisors average 51 years old, according to Cerulli Associates. In fact, in 2018 EY reported that only one financial planner enters the field for every two who qualify for Social Security benefits each year. Notably, fewer than 30% are under 40, according to industry studies.

Importantly, the EY study found that more than half of older financial advisors don't have a succession plan. So, it's becoming critical for the industry to attract younger advisors, not only to continue serving clients as older advisors retire, but to meet the rapidly evolving needs of younger and more diverse customers, including millennials, who have entered their prime working years.

Rob McCoy, director of practice building programs for Prudential Advisors, says there are 247 Gemini partnerships in the increasingly popular program, with 116 senior advisors currently applying to join Gemini, up 17% from a year ago. And for good reason: New program participants generate 10% more business than other new hires. Retention is higher, too, with 62% staying on after 24 months vs. just 42% for other new hires. As the industry grapples with the graying of its workforce, Prudential hired a record 850 new advisors in 2018, with 42% in their 30s and 40s. The trend is continuing so far this year, with 43% in their 30s and 40s.

'George and Syeedah provide a great example of how new and experienced advisors can work together, not only to serve existing clients, but to meet the rapidly evolving needs of younger and more diverse customers,' said Brad Hearn, president of Prudential Advisors. 'Even with the increasing ability to do business online, we're sure consumers-who often grade themselves a 'C' when it comes to financial literacy-will always want human advice as they look to build financial wellness, whether they are just starting out or nearing retirement.'

Choosing a path with purpose

For Smith, the opportunity to work with a mentor who shared her values drew her to Prudential. She was already mulling over a move to the field while still an analyst for a company in New York, where she was a co-chair of an African-American business resource group's subcommittee on financial literacy. In 2010, the committee led research that found financial services companies dedicated very few marketing dollars to black consumers.

So, Smith knew she wanted to focus on underserved communities, including black Americans and women, who she says are the 'gateway to getting an entire family as clients.' She also thought about her family, including her grandmother and 37 cousins. 'My family is always in the back of my mind. It's important for me to make sure that I've done what I can to help them.'

During her search, Smith considered several companies, including some offering more compensation to start. Then she met Barnes when a family friend who worked at Prudential invited her to a women's finance event. It took almost eight months for Barnes to persuade her to join the company. 'I guess he saw something in me that I didn't think was there,' she says.

As it happens, Barnes didn't start out as a financial professional, either. Now 55, he joined Prudential in 1988, hired for an area focused on improving customer experiences. When that department shut down, Barnes looked for a job in the company and a friend suggested he'd be a great advisor.

In 1990, he joined a Prudential Advisor's practice in East Hanover, New Jersey. There, Rudi Floyd, now an agent emeritus who retired after 50 years and was routinely a top producer, showed him the value of building relationships. 'What's in the best interest of the clients has always been my mantra,' Barnes says. 'We're doing this to make a difference in the lives of people we serve.' Now, 29 years later, Barnes is sharing those lessons with Smith and says this kind of mentoring, which helped him build his business, could be key to attracting new professionals and ensuring their success.

The mentoring relationships benefit both sides. While professionals like Smith get an opportunity to build a career, more experienced financial professionals gain the ability to plan for their own retirement while providing peace of mind to current clients through a slow transition, assuring them they'll be cared for by someone they trust. Older agents also get the opportunity to work with digital natives who grew up with tech and understand how it can play an increasingly important role in supporting clients and maintaining strong relationships.

As for the job itself, Smith says, 'I regret not doing this out of college. Seeing yourself helping someone and having an impact, there's a huge level of fulfillment. And you get to make your own hours. To have that freedom at 21? Man, I wish I had done it then.'

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