Hiring Trends: Why Financial Firms Are Hiring Bartenders, Baristas, and More
Large financial firms are hiring more liberal arts majors, bartenders, baristas, and other people from ‘non-traditional backgrounds’ more often than ever before. They are shifting their hiring profile to respond to the rise of roboadvisors and a shift in the work of a financial adviser towards service and relationship management. If you’re coming from a non-finance background, understanding these trends can help you transition to a career as a financial adviser.
First, it’s important to understand the rise of roboadvisors. Roboadvisors are a catchall word to describe websites or mobile apps that give retail investors (aka consumers) automated investment management using software and algorithms to make trades. These roboadvisors will programmatically try to make you as much money as possible – without any human interaction. For more on roboadvisors, visit our post “Financial Advisors – The Lowdown on a Career in Wealth Management (and how to go about it)”.
You would think that this would put financial advisers out of work, but remarkably the industry is expected to grow faster than the national average for the next 10 years. This is because the financial adviser role is shifting towards relationship management and keeping wealthier clients happy.
Shift to service-based backgrounds
As smaller net worth clients use roboadvisors to handle their simple tasks, people are generally waiting until their net worth is higher before seeking out the services of a financial advisor. This means that the average net worth of an investor that you’d work with as a financial advisor is going up, and it naturally follows that they will have more assets to manage as well. This, in turn, means that the average client is now going to expect a higher level of service from their financial advisor, and that takes time, attention, and care.
This is why large firms are hiring more financial advisors than before and hiring from service-based industries. It’s become more important to give a high quality customer experience to these wealthier customers, and it’s easier to teach sharp people with good people skills about finance than it is to find people with deep finance skills and also teach them a service-based attitude.
Emphasis on sales
Sales has always been a key piece of being a financial advisor. You will need to build your own rolodex of clients whose wealth you manage, often from scratch. In the past, this was primarily done through cold calling – today, this is typically done through a cadence of email, calls, and other touchpoints. Now that the average customer has more money than before, sales is even more important for closing these customers. As with relationship management skills, large financial firms have been having more success teaching the finance industry to people with strong sales skills and so are looking for more of these candidates.
Reduced emphasis on financial modeling and analysis
This shift towards people skills has been coupled with a shift from the actual math that used to be more common in the financial advisor role. At large firms, financial advisors will generally work with a financial analyst counterpart on financial modeling and analysis. This is combined with the fact that the average liberal arts major is much more finance and math literate than they were in the past. Most college graduates now have a grasp of algebra-level math and have used Excel – and whatever they don’t know they can look up on the internet or Youtube. And since the majority of day-to-day calculations can now be done on a computer or calculator, you don’t need to be a math whiz to avoid calculation errors.
Last word: large firms are better equipped to make this transition than small firms
We want to finish by noting that transition to service-based backgrounds is most pronounced in larger firms, and that it is not as easy for smaller firms to do so. Larger firms have the scale necessary to compartmentalize different parts of the financial advisory role as mentioned earlier. They can have a team of financial analysts dedicated to helping advisors with the more financially technical parts of the job.
Smaller firms often have no choice but to still exist in the old school model. In an office of 20 people with only a handful of junior financial advisors, it is unlikely that financial analysts’ time will be allocated to help them with technical analysis. As with most junior roles at smaller companies, you will be expected to cover more different aspects of the position than you would at a larger firm.
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