Many Americans are feeling the stress that comes with financial anxiety. In fact, according to Northwestern Mutual’s 2024 Planning & Progress Study, 33% of people are worried about their finances – the largest proportion in the study’s history.

Adding to these financial fears is the reality that 102 million Americans are underinsured or uninsured and the average amount people expect to need to retire comfortably continues to rise. Compound these certainties with a large proportion of the advisor population seeing retirement on the horizon. 109,000 U.S. financial advisors, representing almost 40 percent of the industry head count, will likely retire during the next 10 years, according to a Cerulli report.

We have an industry imperative to exponentially increase how we recruit and develop financial advisors who can help provide more Americans with the financial security they so greatly need.

This is critically important – because advisors can help impact people’s financial well-being. Currently, 64% of Americans who work with a financial advisor say they feel financially secure while a mere 29% without an advisor agree. Moreover, 75% of Americans who work with a financial advisor say they’ll be prepared for retirement compared to 45% of those without one – and people with a financial advisor expect to retire two years earlier with double the retirement savings of those who don’t work with one. 

I offer three recommendations for how the industry can grow the number of advisors to make a positive, sustainable difference in people’s financial lives and meet the needs of the marketplace for comprehensive financial planning.

Grow our relevance in underrepresented markets

Financial security is not ‘one size fits all’ – and financial advisors must represent America’s diverse marketplace. It’s critical for our companies to intentionally make inroads in neighborhoods and communities that have not traditionally had access to financial planning expertise to expand our industry’s footprint.

At Northwestern Mutual – Chicago, we’ve made this a priority. We have forged significant partnerships with colleges, non-profits and professional associations to continue building a pipeline for diverse talent. Today, we have a growing team of financial advisors delivering financial planning counsel in the diverse neighborhoods they grew up in. Skills and career development workshops, internships, financial education seminars, and financial planning classes also help us reach wide-ranging audiences and prospective team members.

Make it easier for people to enter the profession 

There are more and more roles beyond offering financial advice that allow a broader array of individuals to join the profession – such as roles in compliance, client support or marketing. Moreover, teams that blend people with financial services backgrounds and those with ‘nontraditional’ skill sets can be successful in connecting with a more diverse marketplace. For example, we have bilingual team members and former educators without financial services backgrounds whose enormous aptitude for learning and communication has prepared them well for a career that demands building relationships and interacting with others. Of course, we provide these nontraditional candidates with the training and rigorous financial acumen that we would expect from any expert advisor with a more traditional professional background. The bottom line is this: it’s vital to ‘think outside the box’ when recruiting talent and growing the number of advisors our industry needs to help others build financial security.

The industry must invest in the advisor and client experience

Delivering an optimal advisor experience is empowering and enables advisors to do what we do best: serve clients. The industry needs to universally employ a proven framework for success that includes coaching, mentoring, education, and the use of effective technology to do the job. Enabling everyone to do their jobs more effectively empowers the industry and ensures it will continue to thrive.

A big part of helping more Americans build financial security is to make it as easy for both clients and prospective clients as possible. Thankfully, Northwestern Mutual’s financial planning software and our proprietary digital platform enable our advisors to show clients a holistic, comprehensive financial plan with many different financial scenarios. AI is enhancing our productivity by helping us advisors make informed decisions – freeing us up for more personal time with our clients.

There’s a lot of chatter about whether AI will replace advisors. The answer is an emphatic NO. Humans remain far more trusted than AI for financial advice. As Northwestern Mutual’s recent research indicates, only 18% of Americans want AI to give them real-time financial guidance. It’s no substitute for the personal touch of a human advisor. Rather, AI technology as a co-pilot enables advisors to be more efficient. As a result, it’s clear that financial advice will continue to be a people business.

That’s why our industry needs to come together and commit to growing the number of advisors who can help more Americans build financial security. If our companies actively grow their advisor footprint, address the financial needs of Americans in underserved markets, and invest in people so they can effectively perform their jobs, we can make a more positive and sustainable difference in people’s lives.

- Tom Canale is managing director at Canale Financial Group, Northwestern Mutual – Chicago.