Culture and Talent
Work with a purpose: Why millennials leave big finance
- Some millennials are moving from big companies to startups out of a desire for a more flexible, values-based work culture.
- Analysts say legacy companies' slow decision-making structures and revenue models are motivating millennials to make a career switch.
When Chrissy Celaya finished her degree in personal financial planning at Texas Tech six years ago, she said ethics drew her to a career in the field. "I wanted to to help people," she said. "Finance plays such a big role in everybody's life, so if you can ensure people can be financially secure for the future, it's helpful in so many different ways." After two years working at USAA and a year-long stint working at a language institute in Spain, Celaya moved to New York to work at Merrill Lynch. But after a year at the industry giant, Celaya, who is now 27, said she didn't think the culture was a fit. "I had to sell certain products because they generated money for the organization, and that was a huge turn off for me, so when I started to learn about automated investing, it was a no brainer for me to go back to an organization that had the client's interests at the forefront," she said. Celaya said she switched to Betterment, a startup that offers automated investing tools and employs human advisers. Her move to a smaller firm that aligns with her values is not atypical of millennials, who, according to recent research, pay close attention to a company's mission. "Millennials want their work to have a purpose, they want to feel they contribute something to the world and they want to be proud of their employer," read PricewaterhouseCoopers' 2016 Global CEO Survey. The values focus, combined with millennials' lack of loyalty to a single employer -- a recent Deloitte survey found that 38 percent intend to leave their current position within two years -- is rattling the financial advisory industry, a field where the average age of an adviser is 50 and continues to climb. The talent problem in the financial advisory industry Experts note that legacy firms are having trouble holding onto talent. "The concern with legacy firms is less of a talent war and it's much more about talent replenishment," said Michael Spellacy, senior partner of asset management and leader of global wealth management at PricewaterhouseCoopers. "Attached to that, the innovators in the landscape have upended the financial adviser value proposition -- there's been a shift from active management to passive management with the proliferation of artificial intelligence to help guide the financial advisers." Younger, technologically-savvy advisers are less likely to trust the big firms that they perceive don't have the customer's interest at heart. For at least one veteran who mentors up-and-comers, it's an often-cited complaint from younger advisers. "Every single week they contact me," said Paul Pagnato, who worked 19 years at Merrill Lynch before opening his own firm a year ago. "Having a sense of focus and having a sense of mission meaning in their work environment is absolutely critical." Merrill Lynch declined to comment for this story. The culture question The attraction to startups is driven by more than just open co-working spaces and ping pong tables. Startups can be perceived as more open to the development of new ideas, notes one young industry watcher who has worked in the field for six years. "There are three core issues major players have: one would just be the slow decision cycle of the corporate environment where it’s hard to do innovative or disruptive things, on top of that there’s regulation, and the demographics of these companies can sometimes be off-putting to young talent," said Grant Easterbrook, 27, founder of Dream Forward Financial, a 401(k) startup. Previously, Easterbrook said, people working in finance would pivot to other industries if they weren't satisfied, but with the growth of financial technology companies, they can use their skills while pursuing other goals within the startup sphere. "Millennials care about impact and social good -- a lot of the traditional players make money with hidden fee structures, and even with startups that aren't doing impact investing in the traditional sense [investing for social causes over returns or profits], there's more of a feel-good, social-good kind of vibe," he said. For Celaya, not having to upsell customers products and services was a big motivator to move to a startup. "I didn't like the idea of having to cold call and sell products [the customer didn't need] and wanted the flexibility to do the planning the way I wanted to do it," she said. Incumbents respond At least one major industry player said it's changing the way it's organized to help attract and keep millennials. Newark, New Jersey-based Prudential Financial, which has a large investment management practice, has developed an in-house customer office that's designed to be an innovation lab for young talent. "We have garage doors, ping-pong tables and a very open workspace that allows for more collaboration and that has a very different feel to it," said Chrissy Toskos, vice president of human resources at Prudential who is charge of campus recruiting. "The [young] talent is very tech-savvy with more agile ways of working, and we're inviting them to be involved and advance in our culture." The company said it's also offering perks like student loan repayment assistance, subsidized healthy food, on-site fitness facilities and volunteer opportunities. When asked if the moves are in response to a flight of millennials, Toskos said they are a natural evolution of the company's organizational strategy. "It's something born out of where we want to go and how we want to be perceived in the market," she said. In the startup sphere, at least one founder feels the skill set and mindset required to work in a startup is more aligned with where the industry is going. "We look for people that are problem-solvers and people that can execute," said Herbert Moore, 34, co-founder of WiseBanyan, a platform that offers largely automated investing tools, with the support of financial advisers. "In asset management, a lot of the skill sets people are learning in larger firms aren't quite as relevant to what we're doing right now because we've sought to automate those functions." What motivates the best employees, said Moore, is a commitment to a longer-term mission. "No one's going to choose a job just for a free lunch -- what you see in the best people is a desire to do something meaningful."