The Wealth Management Digest

Transcript:

Welcome to this week’s Wealth Management Digest.

The main topic I want to chat about today is based on the Cerulli report, their annual report on U.S. advisor metrics that just came out. The biggest insight in this report is that advisor headcount was largely unchanged in 2023, as the number of advisors essentially didn’t grow versus 2022. On top of that, Cerulli expects roughly 109,000 advisors to retire in the coming years, comprising approximately 37% of advisors out there. So that’s an issue when you have a lot of new advisors coming in and churning very quickly, either leaving the industry or, specifically, the RIA space. So what’s going on here? Just from personal experience, and this Cerulli report supports it, it is twofold. One is young people want to go to places that are growing. So if they go to an RIA growing 5% year-over-year, they will find somewhere else that they have bigger career trajectories if that firm grows. And two is, and this is something that actually comes straight from the report, says, “RIAs and broker-dealers must continue to develop programs and training methods to aid rookies in financial planning and other skills to adequately prepare them to embark on their new career as an advisor.” There needs to be more structured training to attract that young talent. So that’s key for CEOs, for owners of practices out there, is you need to grow to attract talent, and do you need to create a more structured setting for training to give career paths for younger people to want to be attracted to work in our space. That is it for this week. Stay tuned for next week.

– Andres