Advisor Population Continues To Age

Ask anyone on the block and most wirehouses and independent broker-dealers recognize that their core financial advisors are aging and will soon need to be replaced, but very few have done much in the past three years to address the issue. Most have spent their time scaling down the lower-producing employees, (most of which were the younger rookies) in order to cut costs and improve their overall bottom line.

In the meantime, we’ve seen consolidation on all fronts which has created an economic environment for seasoned financial advisors to drift over to independent firms, or to open their own shops. With the economy improving you would think that we would see firms of all sizes trying to look at how to attract and retain quality advisors.

True, there has been an increase in the number of firms establishing new mentor programs and developing recruiting programs, but the majorities are still counting on their seasoned “core” to produce the revenue for the future. The number of financial advisors aged 55 years of age or older increased from 32% in 2007 to more than 36% in 2009 while the number of professionals with less than $50,000 in annual production fell from 55% to 42%…per new report by Pershing LLC, a unit of BNY Mellon.

“The most exciting developments we are seeing that relate to attracting talent are from firms that are developing a value proposition that embraces the hybrid opportunity” says Jim Roth, managing director at Pershing.

More on the Hybrid Advisor model to come…