One of the main challenges facing advisors is sales capacity, a report by LIMRA and McKinsey & Co. found. The report, released Tuesday, found that even as advisory sales forces are aging, they are growing less satisfied than in previous years.
Most advisors are 50 or older, the report found, especially among independent agents and RIAs. Approximately two-thirds of advisors in each of those channels were over 50, and 58% of advisors at independent broker-dealers were over 50. Banks had the smallest concentration of advisors over 50 with 29%.
Independent agents aren’t just older, they’re more experienced. Over half of independent agents have over 25 years of industry experience. Although RIAs had a similar age distribution, just 37% had 25 years or more of experience.
Advisors are looking for growth more than high payouts, according to the survey. Twenty-seven percent said they stayed with their current firm because they could see no better opportunity for growth. The same percentage said they left a firm for because they thought they could find a better opportunity for growth. Thirteen percent of advisors said they stayed with their firm because they were happy with their compensation, and 13% of advisors said they left a firm because they thought they could get more somewhere else.
The survey suggested that by improving in four areas, advisors can drive growth.
First, advisors need to focus on teaming. The survey suggested advisors who gross $200,000 per year could add $30,000 by regularly partnering with other advisors.
Also, client specialization is an area in which advisors need to develop best practices. By targeting a specific group of clients, advisors could add $26,000 in annual production.
Retirement planning is vital to advisors who want to grow their practice. By creating retirement plans for an additional 30% of their current clients, advisors could gain $9,600.