It is the best and the worst of times in the financial advisory business.

Things are probably going great in your practice today because investor confidence has been improving. But five or 10 years from now, a new generation of investors could wreck it.

Yes, asset growth is booming, but many financial planning broker-dealers are disappearing as they miss connecting with the next generation of investors.

That anomalous analysis was recently delivered by Pershing officials. They told hundreds of advisors and other financial professionals at the Discover 2014 conference in Manhattan on Monday that their business, along with that of their parent, BNY Mellon, has been strong after many fat years in the stock market. Yet all is not good in the business.

“Since 2007, a broker-dealer has been going out of business every two days,” said Jim Crowley, Pershing chief relationship manager.

What’s wrong?

Seventy percent of advisors, he added, “are ineffective in communicating their value proposition.”

The irony is financial advisors are today more needed than ever, with millions of would-be clients looking for advice. Still, there are many reasons why investors, especially younger ones, are not interested in your services. These include a generation gap as well as a failure to define your advisory practice and what it does. There is also a danger to advisory practices, Pershing officials warned, in the inability to pass advisory relationships from one generation to the next.

This is all happening in a brokerage/advisor world of creative destruction. It is one in which some firms are prospering at the same time other broker-dealers have been dying, Pershing officials said.

Nevertheless, they told the audience, retirement assets are booming and the need for their services is dramatically increasing. But how will advisors survive the coming transfer of wealth from one generation to the next as well as the millennials’ creation of wealth?

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