The number of financial advisors practicing in the United States may have fallen to 298,000 in 2007, from 301,000 in 2004.
Consultants at Cerulli Associates Inc., Boston, have presented those estimates in a new review of U.S. financial services intermediaries.
While the number of advisors is falling, financial services companies are trying to expand wholesaler teams to serve those advisors more intensively, the consultants report.
One challenge is that more than 60% of the advisors have at least 10 years of industry experience, while only 23% of the wholesalers have been selling externally for that long, according to Bing Waldert, a Cerulli associate director.
Product manufacturers that want wholesalers to give advisors more advice have to come up with strategies for overcoming that experience gap, Cerulli consultants conclude.
To some extent, the consultants say, a decrease in the number of advisors may be a good thing, because the least productive advisors tend to be the most likely to run into compliance problems.
But, in the long run, a failure to attract a large enough number of new advisors could be a problem, the consultants warn.