Adviser Population Aging Fast

More than four in 10 (43%) financial advisers are either at or approaching retirement age, according to research from Cerulli Associates.

In “Advisor Metrics 2013: Understanding and Addressing a More Sophisticated Population,” the Boston-based investment research and analytics firm finds the average age of financial advisers is 50.9. The report shows 43% of percent of advisers are over the age of 55, with nearly one-third falling into the 55 to 64 category.

The growing average age of advisers is affecting different advisory channels differently, the report shows.

Broker/dealers especially are struggling to recruit new young advisers to offset those leaving for retirement, explains Kenton Shirk, associate director at Cerulli.

“As the adviser population ages, broker/dealers and custodians are at risk of losing [assets under management] as advisers exit the industry,” Shirk says. “The independent channels are most at risk because they have the oldest advisers on average.” 

Cerulli suggests firms encourage adviser teams to bring in junior advisers 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 advisers tackle succession planning, and development of internal succession candidates (see “Building a Succession Plan”).

The report also explores adviser industry trends such as market sizing, product use and advice delivery practices.

More on how to obtain Cerulli’s latest report is available here, along with the report’s table of contents.