The challenge of attracting 20-somethings into asset management
Of all the sectors in financial services being hit by technological change, asset management is arguably going to feel the pinch the most. Approximately 90,000 jobs are likely to go as a result of artificial intelligence alone, and if you want to survive you need to be tech-savvy.
Roger Paradiso, the head of alternative distribution strategies at Legg Mason and former managing director of investment solutions and portfolio development at Morgan Stanley Smith Barney’s Consulting Group, has been at the forefront of the evolution of the buy-side. He's chairman-elect of the Money Management Institute’s Board of Governors and is banging the drum for wealth and asset management executives to place a greater priority on attracting the next generation of professionals to the industry to counterbalance a greying workforce.
“I don’t think it’s something our industry has been doing a good job of communicating to young what those opportunities are and why get into it,” Paradiso said. “There have been great changes to the asset and wealth management industry as a whole, which hasn’t taken full advantage of technology yet, but we are at the forefront of an evolution. The impact of technology offers young people a great opportunity for someone to step in and think about something differently.”
Now an industry leader, Paradiso and his peers are faced with a pressing question: Why should young people consider a career in asset management or wealth management?
“There’s a demographic shift passing down money from one generation to another due to the inheritance factor, and through the use of technology, we are now able to support and give better levels of service to a lower-net-worth community that has been in my eyes very underserved,” Paradiso said. “As the landscape widens and demographics change, it’s a great opportunity for younger people to enter the industry.
On the financial adviser side, career development has changed dramatically – financial advisers today have gotten much more accustomed to working in teams rather than trying to survive in a cutthroat sink-or-swim environment on Wall Street.
“Key areas such as wealth planning are now usually more tech-based and collaborative, which is a different mindset compared to what traditional advisers had, feast or famine, as opposed to joining teams of financial advisers and getting areas of specialty,” Paradiso said. “The intellectual part of where the biz is going is true wealth planning, being able to create those plans for clients and take on existing books of business, which creates opportunities.
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