Registered investment advisors that have invested in development of a younger group of professionals are growing faster than firms that have yet to do so, TD Ameritrade reported Wednesday.
RIAs that employed younger advisors experienced a 20% annual increase in their assets between 2012 and 2014, compared with 11% among firms that did not.
The study showed that 45% of financial advisors are between 50 and 69 years old, while only 21% of advisors are younger than 40. TD Ameritrade said this means that retiring baby boomers will depart the industry much faster than they can be replaced.
Yet only a small number of firms have actually invested in the next generation.
“Hiring young advisors today and helping them grow as professionals can help RIA firms in the years to come,” Kate Healy, marketing manager at TD Ameritrade Institutional, said in a statement.