43% of financial advisors are either at or are approaching retirement, according to new research from global analytics firm Cerulli Associates. «The average age of financial advisors is 50.9 and 43% are over the age of 55,» reports Kenton Shirk, associate director at Cerulli. «Nearly one-third of advisors fall into the 55 to 64 age range.»
And this creates challenges. «As the advisor population ages, broker/dealers and custodians are at risk of losing AUM as advisors exit the industry,» Shirk explains. «The independent channels are most at risk because they have the oldest advisors on average.» Broker/dealers continue to struggle to recruit new young advisors into the industry to offset those advisors who are nearing retirement, Shirk continues.
Cerulli suggests firms encourage advisor teams to bring in junior advisors and train them in a specific area of expertise in order to increase the success rate of these new recruits. To guard against asset attrition, broker/dealers and custodians need to provide support and resources to help advisors tackle succession planning, and development of internal succession candidates.
In their latest report, Advisor Metrics 2013: Understanding and Addressing a More Sophisticated Population, Cerulli focuses on advisor trends and consumer information, including market sizing, advisor product use and preferences, and advice delivery.