by Maurizio Primanni, CEO of the Excellence Group, for Advisor magazine
The inclusion of young financial advisors in network banks is a complex and never fully resolved issue, often approached as a simple problem of generational transition. However, to understand its true significance, it is essential to contextualize it in the profound changes in the market and the growing demand for financial advice that results from it.
THE AVERAGE AGE OF FINANCIAL ADVISORS IS FIFTY YEARS
The average age of financial advisors remains high, even if the data we have processed on the OCF Register and the 2023 OCF Annual Report show a downward trend, indicative of a turnover already underway. The average age of financial advisors grew slightly, going from 51.3 years in 2019 to 51.7 years in 2023. In the same period, the number of advisors under 40 increased, rising from 6,019 (11.3%) to 7,311 (14.1%), of which under 30 years old from 933 (1.8%) to 2,128 (4.1%) and in the 30-39 years from 5,086 (9.5%) to 5,183 (10.0%). Again based on the data processed, in 2023 young people under 40 represent over half of the new members of the OCF Register, with an increase of 57% in 2023. Finally, it emerges that among the consultants recruited by the main network banks, the share of under 40s increased by 19 percentage points between 2019 and 2023, swelling from 36% to 55%.
A STRUCTURAL QUESTION
The profession of financial advisor presents some structural characteristics that discourage the entry of new generations. It is in fact a freelance activity, where incomes are proportionate to the wealth managed. This model requires years of dedication to reach an optimal condition, identifiable in the management of a portfolio of approximately 18-20 million euros, distributed across a base of 120-150 customers. This goal, although profitable, appears distant and difficult to achieve for many young people, who can easily lose motivation. In addition, there is a significant cultural barrier: in Italy, the poor economic and financial culture, combined with the almost lack of university courses dedicated to financial consultancy, makes access to the profession more complex than in other countries. A further obstacle is represented by the absence of targeted incentives to facilitate the start of a career. A possible solution is the adoption of an initial economic support model, which provides a minimum compensation during the period of starting up the profession, reimbursable once an adequate volume of earnings has been reached.
THE MARKET OPPORTUNITY
Our research, based on the comparison between the Italian and US markets, highlights a significant anomaly: while in the United States the financial consultancy sector continues to expand, Italy is experiencing difficulty in increasing the total number of active financial consultants. Over the next 1012 years, Italy will probably need around 7,000 new consultants to respond to the growing demand for consultancy from clients and to ensure sustainable generational turnover. This objective can be achieved through an ecosystem capable of attracting young people, supported by specific public policies, such as tax breaks and economic incentives for networks that implement dedicated insertion plans.
IN SEARCH OF A NEW PARADIGM
Many networks have already started projects to recruit young consultants, but often the approach is limited to simply transferring portfolios from senior to junior consultants. While this model represents a step in the right direction, it is not sufficient to address the need to broaden the base of professionals. To have a significant impact, it is necessary to prepare a broader offer for young people, capable of combining mentoring, innovation and continuous training. Mentoring is an essential element for transferring skills and experience, but it must be rethought in a current way. Young consultants must not just learn “what the expert consultant does”, but must also be empowered to bring innovation and new ideas to the sector. In parallel, it is essential to build a bridge between generations. Networks must encourage teamwork, where the senior consultant brings experience and clients, while the junior consultant contributes, with an innovative approach and better use of technologies, to the development of relationships with clients.
INNOVATION AND PROFESSIONAL DEVELOPMENT
Innovation must play a central role in this new paradigm. The integration of advanced technologies, such as artificial intelligence and data analytics, offers the opportunity to significantly improve customer profiling and the personalization of consultancy. Young people, digital natives, have a natural competitive advantage in this area and can represent the main driver of the technological evolution of networks. Finally, it is crucial to create targeted professional development paths. The networks must offer new entrants continuous training, focused on technical, methodological and relational skills. Structured training programs can accelerate the onboarding and growth of new consultants.
