Nearly half of the advisor workforce is at or near retirement, which means more firms must recruit younger advisors to accelerate their succession plans, and also puts broker dealerss and custodians at risk of losing assets under management, according to a just-released study by Cerulli Associates.
“The average age of financial advisors is 50.9, and 43 percent are over the age of 55,” reports Kenton Shirk, associate director at Cerulli, in releasing the research firm’s newest study, “Advisor Metrics 2013: Understanding and Addressing a More Sophisticated Population.”
“Nearly one-third of advisors fall into the 55 to 64 age range.”
Cerulli focuses on advisor trends and consumer information, including market sizing, advisor product use and preferences and advice delivery.
“As the advisor population ages, broker-dealers and custodians are at risk of losing AUM as advisors exit the industry,” Shirk explains in a statement. “The independent channels are most at risk because they have the oldest advisors on average.”
Broker-dealers, Shirk added, “continue to struggle to recruit new young advisors into the industry to offset those advisors who are nearing retirement.”
Cerulli says that firms should encourage “advisor teams to bring in junior advisors and train them in a specific area of expertise in order to increase the success rate of these new recruits.”
To guard against asset attrition, broker-dealers and custodians need to provide support and resources to help advisors tackle succession planning, and development of internal succession candidates.