Never mind the generational wealth transfer between baby boomers and their heirs; there’s another generational wealth transfer in the works—this one between boomer-age financial advisors and their younger employees.

In a recent report, Cerulli Associates, the financial services research firm, estimates that 110,337 advisors, or 35.5% of all advisors, expect to retire within 10 years. On average, this group manages $52.6 million in assets. In aggregate, they control $5.8 trillion, or 36.6% of total advisor-managed assets.

Cerulli’s Assets in Transition Model analyzes advisors in each channel separately and divides advisor profiles across multiple tiers based on practice AUM levels. Cerulli expects the wirehouse channel to see roughly 18,200 advisors retire within 10 years. This group manages $2.6 trillion in assets, or 42.3% of total channel assets. Advisors in the independent broker-dealer channel who are expected to retire manage 31.5% of channel assets.

Cerulli says the retail bank broker-dealer channel has the lowest degree of succession risk, with just 16% of that channel’s advisors planning to retire within 10 years. That group manages 17% of channel assets. The demographics seem to favor this channel, as 52% of advisors affiliated with banks and credit unions are between the ages of 45 and 54, versus 33% for the industry overall. And just 19% of advisors in the retail bank broker-dealer channel are ages 55 to 64 versus 29% for the industry overall.

According to Cerulli, banks tend to have higher-volume client models, meaning they must hire junior advisors to support larger client bases. “This infuses new advisors into the industry,” says Cerulli in the “Sizing Up Succession Risk” section of its second-quarter The Cerulli Edge—U.S. Advisor Edition report.

Cerulli says larger practices are better prepared for a smooth transfer of assets, aided by internal support systems to transition a retiring advisor’s assets to other advisors at his or her firm. For younger advisors in line to take over assets from a retiring advisor via continuity agreements, the flip side is they need to make sure they have the practice management infrastructure in place to handle the additional business. 

Regarding succession plans, Cerulli found that 45% of wirehouse advisors have plans to turn over assets to an existing advisor in the same practice. That was followed by retail bank B-Ds and hybrid RIAs (both at 38%), the collective category of national and regional B-Ds (32%), independent B-Ds (28%), independent RIAs (24%) and insurance B-Ds (8%).

Of course, taking over another advisor’s clients doesn’t guarantee that the assets will stay with the new advisor. “There is also greater risk of client attrition if clients have not developed a substantive relationship with the acquiring advisor,” Cerulli says.