BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook

Andrew B. Balson, a longtime managing director at the Boston-based private equity firm Bain Capital, has left to start a new investment fund.

Mr. Balson, a 17-year veteran of Bain Capital, has hired his first employee, Lara Fox Moskowitz, who works in investor relations at the private equity firm General Atlantic, Ms. Moskowitz confirmed on Tuesday. She will be in charge of operations and strategy. The new fund, which will be based in Boston, does not yet have a name.

Bain Capital notified its investors of Mr. Balson’s departure last December, according to a person briefed on the matter who was not authorized to speak publicly about it. The move was not publicly reported at the time.

Mr. Balson, 47, joined Bain Capital in 1996 and was promoted to managing director in 2000, according to a biography that until recently was on the private equity firm’s website. He focused on investments in technology, media and telecommunications, as well as in the consumer, retail and dining businesses. Before Bain Capital, he worked at Bain & Company, the management consulting firm from which Bain Capital was created.

His new fund is expected to make private equity-style investments with a longer time frame. Private equity firms tend to hold investments for three to five years, but Mr. Balson’s fund intends to buy companies or equity stakes and hold them for 10 years or more.

The departure of Mr. Balson came as Bain Capital began investing a new private equity fund, which it finished raising in April. In general, the establishment of a new fund is a fresh chapter for a private equity firm and can give senior executives an opportunity to depart. Another longtime Bain executive, Mark Nunnelly, also retired this year.

The full article can be found at NYT DealBook.

BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook

Joseph H. Clinard Jr. is 76 and spends his days planning for retirement — just not his own.

Mr. Clinard has worked for more than 50 years as a financial adviser, and he has no plans to stop anytime soon, despite the fact that many of his clients have stopped working or soon will.

“I don’t think my wife wants me home, to tell the truth,” Mr. Clinard said.

Many of Mr. Clinard’s peers share his outlook. The average financial adviser in the United States is older than 50, a number that shows no sign of getting lower because relatively few young people are interested in the work. That is creating a problem for Wall Street, which after the financial crisis likes the idea of managing other people’s money more than it did before. As both independent firms and large broker-dealers attached to investment banks try to expand their asset management businesses, they must figure out how to attract and retain a fresh pool of talent that is increasingly looking to find its riches elsewhere.

“All of us in this industry are facing the same dilemma, which is, where is that next generation going to come from?” said Erica McGinnis, the president and chief executive of the AIG Advisor Group, where the average financial adviser is 54. “There certainly are people who are not being served by financial advisers because there are not enough of them.”

Of the 315,000 advisers working in the United States, only 5 percent are younger than 30, according to data from the consulting firm Accenture. Richard Stein, a partner at the executive recruiting firm Caldwell Partners, estimates that half of all advisers working today are within 15 years of retirement.

At the same time, firms like Morgan Stanley and Bank of AmericaMerrill Lynch, which rely on thousands of advisers to serve their clients, have made it clear that they intend to increase their wealth management businesses as traditionally more lucrative operations, like trading, have largely dried up.

“It’s a real problem for them because the only way they can grow their assets under management is by hiring new advisers, and there’s a limited supply,” Mr. Stein said.

As a whole, Wall Street is a less attractive place to work than it used to be for new graduates. Many Americans distrust the banking industry more now than they did before the financial crisis, and the paychecks aren’t as large. Fewer college students want to go into the financial services sector at all, Mr. Stein said. Instead, they are drawn to budding social media and technology start-ups, hedge funds and other fields beyond the financial services sector.

In one sense, that could mean less competition — and more opportunity — for younger people who choose to become financial advisers. But the compensation model has changed as well.

Advisers used to rely on commissions, meaning that they would make money from every transaction executed on a client’s behalf. But the industry has shifted more toward a fee-based model, which pays an adviser a percentage of the money under management. That may be fine for an older adviser who has a large book of clients, but it can be a deterrent for people just starting out in the business.

Big firms say that the fee-based model helps align the interests of clients and their advisers, but it is also contributing to their staffing problem. Big retail brokerage firms are increasingly losing advisers to independent firms, which offer a bigger cut of fees. According to Mr. Stein, more than $100 billion followed brokers from the big firms to independent ones last year.

The full article can be found at NYT DealBook.