The investment sector relies heavily on the talent and expertise of its workforce. However, increasing life expectancy and career lengths are transforming this critical asset. Research from Stanford indicates that reaching the age of 100 is becoming more common in several countries, including the United States, where career spans may exceed six decades. This trend challenges traditional notions of work and career progression.
In light of these changes, investment firms must reassess how they manage and cultivate their talent.
The focus often lies on shifting client expectations, especially regarding wealth transfer and retirement funds. Yet, a deeper disruption is emerging internally: harmonizing the efforts of up to five different generations of professionals, ensuring continuous learning, and maintaining productivity and well-being throughout varied career trajectories.
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The impact of multigenerational workforces
The essence of an investment firm is its human capital, now influenced by a diverse range of professionals from Traditionalists to Generation Z. This generational diversity can lead to friction within teams. It is essential for firms to recognize three primary areas of conflict stemming from these differences:
- Career stage impacts how conflicts manifest. For instance, junior analysts may find their voices overshadowed by senior colleagues who adhere to more traditional values.
- Mid-career professionals, such as portfolio managers, often contend with the expectations of both junior and senior team members.
- Chief Investment Officers (CIOs) face the daunting task of aligning these multigenerational teams toward common objectives, despite their varied work styles.
Addressing generational challenges
The AARP reports that a significant majority of executives across 36 OECD nations view multigenerational workforces as vital for enduring success. However, merely reacting to conflicts as they arise is not a sustainable strategy. Companies should proactively implement measures to manage these dynamics effectively.
As populations age, the OECD anticipates that many nations will require individuals to remain in the workforce beyond the conventional retirement ages of 60 or 65 to uphold living standards and counteract labor shortages. This trend is echoed in findings from the CFA Institute, which reveal that 10% of surveyed members globally are aged 61 or older.
Adapting to longer careers
The implications of extended careers are not uniform across investment roles. For example, junior analysts might prefer broad-based knowledge accumulation rather than immediate specialization in a specific sector. This often leads to frequent job changes, a trend increasingly observed among early-career workers across fields, where many remain in a position for no longer than two years.
Conversely, mid-career portfolio managers must continuously enhance their skills in response to evolving client needs. In contrast, CIOs are likely to embrace long-term strategic planning, focusing on succession strategies, knowledge preservation, and adaptable role designs to ensure team cohesion as career lengths increase.
Client management in an aging world
As the population ages, more clients will need to balance income generation with capital growth during their later years, anticipating longer work and life spans. This stands in stark contrast to traditional income-focused withdrawal strategies. Moreover, longevity influences wealth management, as women generally outlive men by five to six years. In the U.S., widowed women are projected to inherit nearly $40 trillion from their spouses. This necessitates that investment professionals at all levels hone their soft and technical skills to engage with clients over extended relationships, particularly as the demographic shifts toward female clients.
Health considerations are integral to the longevity discourse. While client investment behaviors are evolving, the expectations of investment professionals regarding their employers are also transforming. The historically high-pressure nature of the investment field persists, but as professionals continue working into their later years, these demands extend further into their careers. Additionally, as they age, the likelihood of encountering chronic health issues increases, posing financial implications for employers.
Embracing change for long-term success
Moreover, concepts such as successful aging are prompting a shift towards comprehensive health support in the workplace. Companies may need to reevaluate traditional health insurance plans to encompass mental health and social connection alongside physical wellness, as employees live longer and work more.
In light of these changes, investment firms must reassess how they manage and cultivate their talent. The focus often lies on shifting client expectations, especially regarding wealth transfer and retirement funds. Yet, a deeper disruption is emerging internally: harmonizing the efforts of up to five different generations of professionals, ensuring continuous learning, and maintaining productivity and well-being throughout varied career trajectories.0
In light of these changes, investment firms must reassess how they manage and cultivate their talent. The focus often lies on shifting client expectations, especially regarding wealth transfer and retirement funds. Yet, a deeper disruption is emerging internally: harmonizing the efforts of up to five different generations of professionals, ensuring continuous learning, and maintaining productivity and well-being throughout varied career trajectories.1
In light of these changes, investment firms must reassess how they manage and cultivate their talent. The focus often lies on shifting client expectations, especially regarding wealth transfer and retirement funds. Yet, a deeper disruption is emerging internally: harmonizing the efforts of up to five different generations of professionals, ensuring continuous learning, and maintaining productivity and well-being throughout varied career trajectories.2
In light of these changes, investment firms must reassess how they manage and cultivate their talent. The focus often lies on shifting client expectations, especially regarding wealth transfer and retirement funds. Yet, a deeper disruption is emerging internally: harmonizing the efforts of up to five different generations of professionals, ensuring continuous learning, and maintaining productivity and well-being throughout varied career trajectories.3
