Where are wirehouse advisors and the overall industry headed? The latest research paints a conflicting picture.

The number of advisors in the U.S. grew by 1.1% in 2014, the first time since 2005 the headcount had increased, according to Cerulli Associates. In a recent report, Cerulli says 308,937 advisors did business in 2014 across the wirehouse, broker-dealer and RIA channels — up slightly from 305,610 in 2013.

Cerulli predicts that the upward momentum should continue over the next three years. “Many positive developments led to the headcount growth last year,” explained Kenton Shirk, associate director at Cerulli, in a statement. “From the advisor perspective, there is a heavier focus on teaming and onboarding rookie advisors into multi-advisor practices. Advisors are eager to hire junior advisors so they can refocus their own efforts on their largest and most ideal clients. There is also greater awareness and concern about succession preparedness.”

The research group cautions, however, that the looming succession cliff may reverse positive growth by 2020. With a big rise in advisor retirements, the headcount should start to fall again at an even faster rate than in recent years, it explains. “In upcoming years, the industry needs to lay a solid foundation to recruit and groom new talent in order to dampen post-2020 headcount declines,” Cerulli said.

The research group’s latest report, “Advisor Metrics 2015: Anticipating the Advisor Landscape in 2020,” attributes some of the rise in 2014 to advisors joining existing teams rather than establishing new practices. (According to the report the number of advisors decreased by 12.7% between 2005 and 2013.)

Advisors were more heavily focused on teaming to bring rookie advisors into multi-advisor practices, and were eager to hire junior advisors to help build their practices’ top lines, it says. Some were also hiring service advisors, whose roles are more like relationship managers, to build advisory capacity for senior advisors.

According to the report, some 28% of rookie advisors are female, compared with 14% in the advisory industry as a whole.

Twenty percent of senior advisors considered rookies’ limited investment or financial planning expertise to be a major challenge when grooming them for succession, and 64% also said the length of time required to learn the business was a challenge.

Cerulli says the data compiled in the new report comes from proprietary surveys of more than 6,000 financial advisors affiliated with wirehouses, independent broker-dealers, regional BDs, RIAs, dually registered practices, bank BDs and insurance BDs.

Advisors face challenges from aging client bases, with 57% having clients above the age of 60. Sixty-eight percent of advisors said they used niche marketing techniques, and 37% of those considered it a very effective marketing activity.

FAs report that 38% of their clients have received comprehensive written financial plans, and this figure would increase to 48% by 2018. At the same time, the percentage of clients receiving no financial planning services is expected to decline by 10%.

Roughly 14% of wirehouse mega-team advisors say they are undecided about whether to remain affiliated in the next 12 months, compared with 5% for all advisors across the industry. Big wirehouse teams were leaving their options open, the report explains.

Sixty-four percent of wirehouse and regional advisors who changed firms in the past three years say concerns about the quality of their broker-dealer’s culture had significantly influenced their decisions to move.

The appeal of the RIA channel for large advisors, for instance, has put a drag on both revenue and profitability of independent broker-dealers. The report said numerous IBDs had introduced RIA platforms that allow advisors to leverage their platforms while holding a separate and independent RIA.

Among independent advisors who were planning to retire in the next five years, 52% said they had streamlined workflows in preparation, while 45% have upgraded their technology. Forty-three percent of independents preparing for retirement said they have engaged a consultant to prepare.

In preparing for succession, 45% of respondents expressed considerable concern about transferring clients to the buyer of their practice. Valuing their practice and finding a buyer ranked second and third among their top concerns.

Eighty percent of independent advisors who planned to retire in the next five years reported that they either had a written succession plan in place or intended to have one in the next 12 months. For employee advisors, however, this figure fell to 54%.