How to Fix the Financial Advisor Shortage

Now that millennials make up the largest group in the American workforce and are becoming parents, financial advice will become a critical part of their lives. In many cases, individuals will consult with a financial advisor to plan their long term financial goals and budgeting. But a 2015 report from Boston-based research group Cerulli Associates found that the number of financial advisors in the U.S. fell for the fifth straight year. According to the report, the number of financial planners hit its peak in 2008, but has fallen by approximately twelve percent through 2015, leaving a growing shortage of advisors in the industry.

That’s why TD Ameritrade Institutional (NYSE:AMTD) plans and sponsors the NextGen Financial Planning Scholarships. Now in its fourth year, TD Ameritrade Institutional offers scholarships to 12 students and two universities to encourage growth in the field.

Students studying financial planning from various universities are selected based on their academics, recommendations and commitment to giving back and awarded $5,000. Two of the awards are reserved for candidates from underrepresented groups to increase racial, ethnic and gender diversity. A total of $75,000 in grants are awarded to universities to foster financial planning education program.

“Many of today’s financial advisors learned through training programs not provided in college, but those programs no longer exist,” says Kate Healy, the managing director of marketing for TD Ameritrade Institutional. As a result, Healy says that it’s imperative for universities to begin offering a financial planning field of study. She cites that the degree is new in universities and began to grow within the past ten years.

“If you think of the millions of Americans out there and our complicated financial lives, there won’t be enough advisors to give financial advice,” says Healy.

TD Ameritrade Institutional’s goal is to cultivate the next generation of financial advisors. Millennials aren’t just candidates for the job -- the generation will soon be seeking financial advice as they become parents.

“There are more CFPs (certified financial planners) over the age of 70 than there are under the age of 30,” says Healy.

Healy says that firms should begin to recruit millennial planners to both fill employment gaps as well as appeal to millennial investors, allowing them to broaden their client base.

One of the winners, Gerika Ballard, a rising junior at Utah Valley University in Orem, UT, told FOXBusiness.com that she wanted to become a financial advisor after discovering her passion for helping people. After an 18-month service trip with the Latter Day Saints in Washington State, Ballard knew that she wanted to help people. She says the combination of wanting to help people and her obsession with numbers led her to pursue the financial planning major in school.

“When financial health improves, your physical, social, mental and spiritual health improves as well,” says Ballard.

Ballard says that her favorite aspect of financial planning is that it not only has an immediate impact on a person, but that it has a lasting effect. “I get to see changes that will help people now and 50 years from now,” says Ballard.