Hiring young talent is imperative for financial advisors. But finding so-called “next-generation” advisors can be a challenge — largely because young college graduates are often unaware of financial advice as a career path, according to firms on CNBC’s annual FA 100 ranking.

These top firms have found ways to overcome hiring hurdles. Some use internship programs as a pipeline of next-gen advisors, while others leverage industry organizations and even existing client relationships.

“It’s a big focus for us,” said Wayne Wilbanks, managing principal and chief investment officer at Wilbanks Smith & Thomas Asset Management in Norfolk, Virginia. “We are keenly aware of empowering the next generation.”

There are many benefits to finding and fostering young talent.

For one, it may help win over more client business as existing clients age, Wilbanks said.

“We have a lot of 80-year-old clients who have 50-year-old children and 18-year-old grandkids who inherit the money,” he said. “The [young] client who just inherited $2 million may want to deal with someone closer to their age.”

Young advisors are also important to firms’ succession plans; these business-continuity plans also help put clients at ease.

“I think it’s in everyone’s benefit to have younger talent that can potentially buy into the firm to help liquidate some of the more senior shareholders,” said Rachel Moran, a shareholder, certified financial planner and director of personal wealth management at RTD Financial, based in Philadelphia.

Young advisors bring fresh ideas, perspectives and knowledge, especially in areas of technology, Moran said. A pipeline of next-gen advisors also helps career advancement in the whole firm — when associate financial planners are promoted, young advisors can backfill their open spots, she said.

Yet, the industry doesn’t have many young advisors.

The number of CFPs in their 60s is more than triple the number in their 20s, for example.

Some universities have dedicated tracks for financial planning. But most schools tend to offer a general finance or business degree, meaning the financial-planning profession isn’t highly visible, advisors said.  

“There’s a lot of demand [for young advisors] in the advisory industry, but [universities] are not presenting it to them as an option,” Manal Fouz, chief compliance officer at Azzad Asset Management in Falls Church, Virginia.

Firms have nevertheless found various ways to identify and hire next-generation talent.

RTD Financial and Azzad have had ample success with internships, typically for one college student each year. If the internship goes well, the firms hire candidates full-time.

At RTD, successful interns are brought on as associate financial planners. The firm has relationships with various universities that offer financial planning tracks, such as Temple University, which is also in Philadelphia, and Virginia Tech, which Moran herself graduated from. It also identifies potential young hires through its local chapter of the Financial Planning Association.

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Similarly, Wilbanks Smith & Thomas posts on various industry sites — like the CFA Institute, an association that offers the Charted Financial Analyst designation — as well as regional college sites to identify young talent.

The firm has had success finding more candidates farther afield due to the Covid pandemic, Wilbanks said. An individual who’d previously been eager to take a job in big cities like New York or Atlanta may now be more willing to move to Norfolk to work, for example, he said.

Azzad has an additional recruiting challenge, Fouz said: The firm follows Islamic investing and financial-planning principles, and looks for candidates who are passionate about a faith-based investing style.

The firm has identified prospective employees through existing client relationships — often, the college-age kids of parents who are Azzad clients. Its lead planner, who’s been with the firm for more than a decade, was introduced to the firm this way when she was in her early 20s — she started as an intern.

(The 2021 CNBC Financial Advisor 100 ranking will be revealed at 8 a.m. ET on Wednesday, Oct. 6.)