The RIA industry is struggling to properly nurture its employees, with many processes for doing so falling short, the 2025 RIA Talent & Growth Report from DeVoe & Co. found.

"This year’s survey reveals a troubling trend: firms are slipping backward on the fundamentals of people development. Many of the systems that drive employee growth, engagement, and retention are stalling or eroding, the new report, subtitled "The Slide Toward Mediocrity" and sponsored by Invesco, says. "Career pathing has become the top demand from next-gen professionals. Performance management is still inconsistent. Incentive compensation plans lack clarity. And training remains an afterthought at most firms."

Some positive progress endures among registered investment advisory firms, according to DeVoe, founded by CEO David DeVoe, which said it wasn't yet sounding alarms.

"But we are raising flags. For too long, firms have relied on a companyʼs mission, its employeesʼ loyalty, and a great culture to carry their people strategy. That is no longer enough. Purpose is not a substitute for structure. And good intentions won’t prepare the next generation or optimize the engagement of the current one," the report says, reflecting survey answers from firm leaders and employees.

"The hard truth about today’s RIA people development is the industry is trending toward mediocrity. Unless firms recommit to the fundamentals, this trend will calcify, and RIAs will experience continued erosion of their most important asset. It’s time to get back to basics and reinvest in what has always made this industry exceptional: its people," it says.

Among other findings, DeVoe, a strategic advisor to wealth managers, reports that:

  • Younger "next-gen" professionals most want career path clarity, based on their requests to firm leaders. Only 38% of advisors believe their firms provide defined career paths, down from 50% in 2024, the report says. Young advisors also want a path to partnership or equity and stronger training and coaching. In recent years, firms have shifted from clearly articulated career paths toward informal direction.
  • Incentive compensation structures are eroding, with only 43% of firms reporting a clear, methodical plan, a slide from 50% in 2023. Employees were asked to rate their firm’s incentive compensation plan on a 1-10 scale; DeVoe translated their responses into an industrywide score, -31. "A negative 31 score is shockingly low," the report says.

"That number should stop leaders in their tracks. Compensation, one of the most tangible forms of recognition, is generating active detractors. In an already competitive labor market, that’s more than a missed opportunity. It’s a vulnerability."

  • Next-gen management readiness is weakening, with 45% of firms expecting a “bumpy transition,” up from 34% last year, and only 27% feeling confident in their future leaders. Many firms think about succession but pause at the planning stage, the report says.

    • “Realistically, owners should start thinking about these things when they have around $100 million in AUM,” CEO DeVoe says in the report. “If you hit $1 billion and haven’t sold any shares internally, you could be in a tough spot to transition all the equity internally.” Preparation in equity, management and continuity secures a firm’s future, the report said.

    The consulting firm also flagged a troubling movement in what had been a positive trend: attrition.

    "Attrition has been one of the few consistent bright spots in recent years, but that trend appears to be reversing. While 58% of firms reported no undesired attrition in 2025, a strong showing by historical standards, that figure is down from 68% in 2024, marking the first decline in three years. At the same time, the percentage of firms experiencing somewhat higher attrition rose from 14% to 19%, and those reporting much higher attrition reached 9%, the highest level since 2022," the report says.

    "In the context of broader declines across career development, training, and succession readiness, these shifts carry significance. They point to emerging disengagement, particularly among next-generation professionals seeking growth, recognition, and long-term opportunity. Retention remains relatively strong, but momentum is fading."

    There's plenty time for RIAs to change course, DeVoe says. The firms that succeed will commit to talent as a strategic priority, offer transparency and "intentionality," and put systems in place "to show employees where they are going and how to get there."

    DeVoe & Co. surveyed more than 100 representatives of RIA firms from March to May. Respondents were senior executives, principals or owners of firms with $100 million or more in assets under management.

    Pictured: David DeVoe

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