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September 09, 2022 at 10:21 AM
Related: 12 States High Earners Are Flocking To
Young financial advisors looking for the best area to start their careers have a good deal of choice, as companies everywhere — including financial advisory firms — are struggling to beef up their workforces in a tight labor market.
A new study from SmartAsset that looked at the 100 biggest cities in the U.S. shows that some locales are more attractive than others for fledgling financial advisors.
The search for new talent comes at a critical time for many advisory firms, as the average advisor age increased from 54 to 57 between 2020 and 2022, the study said, citing J.D. Power research.
Other recent research found many advisory firms in crisis, with their leaders lacking confidence in the next generation’s ability to take over. One reason is that they are simply not doing enough to prepare young staff members for leadership roles.
To find the best cities for young financial advisors to start their careers, SmartAsset researchers compared data for 100 U.S. cities across five metrics:
- Average financial advisor earnings
- Financial advisor search volume relative to population, the data coming from SmartAsset’s financial advisor matching tool
- Percentage of high-earning households
- Percentage of the population nearing retirement
- Rent as a percentage of average financial advisor earnings
On this last point, residents in cities are considered burdened by housing costs when they spend more than 30% of their income on housing, according to Department of Housing and Urban Development guidelines. SmartAsset found that most financial advisors pay significantly less than 30% of their income on housing in all 100 cities. The study average was 11.1%.
Researchers ranked each city in every metric, giving full weighting to each. They then found each city’s average ranking and used the average to determine a final score.
See the gallery for the 15 best cities for young financial advisors to start their careers in 2022.
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