The latest in Pershing LLC’s series of studies on the state of the advisor industry has found that human capital remains a thorny problem for independent broker-dealers, with the average age of BD reps continuing to increase while attrition from BDs is growing.
The independent study released Tuesday by Pershing, called The Race For Top Talent II, was conducted by FA Insight, the advisor-centric research firm whose principals are Dan Inveen and Eliza DePardo, and follows a 2007 report on the same topic that was called The Race for Top Talent.
In fact, one of the conclusions of the study is that in a shrinking BD universe—since 2003, the BD industry has annually lost an average of more than 100 firms per year, according to the study—broker-dealers must “evolve their recruitment, development and retention practices or risk being left behind.” Good recruiting alone is not sufficient, the report argues, saying that “without equal emphasis on professional retention and development, broker-dealers will never enjoy sustainable success.”
Inveen (left), director of research at FA Insight, said in the statement accompanying the report that the market for “talented” reps will “become even more competitive as demand exceeds supply.”