Over a third of US advisors plan to retire within 10 years
Financial advisors have been retiring faster than they can be replaced, and that trend shows no sign of abating, according to a recent report from Cerulli Associates.
But that coincides with an overall shift among established advisors going from wirehouses to RIAs. And although it’s unlikely that there will be a one-to-one replacement of advisors in the years ahead, succession planning has never been easier.
Nonetheless, there will be a “critical need for the industry to attract and retain talent” as more than 109,000 U.S. financial advisors – representing 38 percent of industry head count and 42 percent of assets – will likely retire during the next 10 years, a report published Tuesday by Cerulli noted.
That’s because the “rookie failure rate” is nearly twice as high, at 72 percent, the firm stated. Last year, the number of financial advisors in the country went up by about 2,700 compared with the start of 2022, according to the report.
“Older, established advisors continue to move toward the RIA channels as they retain more control over factors such as being able to sell their practice externally and establishing a transition plan,” Cerulli stated. “A new, younger advisor is more likely to enter the industry working for a broker-dealer due to the wide array of support resources provided from the time of hire which can bring down the average age despite the majority of assets being managed by ‘older’ advisors. Across all channels, advisors 55 and older manage 56.7 percent of all assets despite representing only 42 percent of advisors.”
During the first nine months of 2023, RIAs and independent broker-dealers notched up their head counts by 856 and 685, while wirehouses lost 612 on a net basis, recent InvestmentNews rese
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