As the RIA model continues to become increasingly popular and assets in the space continue to climb (Cerulli estimated that over 25% of all client assets would be managed by RIAs last year), this is a critical time for the industry. Changing demographics and generational wealth transfers will lead to tremendous shifts in the space for advisors. How will we address the growing need for younger talent? How will smaller firms continue to grow in an over-crowded marketplace? How will technology continue to evolve in the industry? Will advisors need to change their service models to reflect the needs and preferences of next gen clients? These are all questions that will need to be answered sooner rather than later.

Here are a few key trends advisors should keep an eye on in 2015:

We Aren’t Getting Any Younger
Considering the average age of advisors was 58 in 2014 and less than 20 percent of advisors are under the age of 40 – and only 5 percent are under the age of 30 – it’s becoming increasingly clear that we aren’t getting any younger. Couple that with the fact that most advisors don’t typically retire, but see their careers as a “die with your boots on” endeavor, the average age of individuals in our line of work is going to continue to climb. Most advisors are not interested in cashing out and walking away. In fact, many advisors who have a succession plan or exit strategy in place would likely admit that it really is a “rolling five-year plan” if you pressed them about it. In other words, they plan on retiring “five years from now” and after a year passes, they will still plan on retiring “five years from now.” Eventually the clock will have to start.

Younger Advisors Are Rising To The Top
While many advisors are in the twilight of their careers, several younger reps are really starting to stand out. Our experience in speaking with many advisors has been that there are a growing number of individuals under the age of 50 building sizable and successful firms. Most of the fast-growing firms and practices that are approaching the $1 billion mark in AUM are run by incredibly smart, young, confident, creative and proactive advisors. This trend has been aided by the move to independence of some very sharp teams from the wirehouse channel. There are a rising number of advisors in their 40s leading cutting-edge firms across the country, including AdvicePeriod, Mariner Wealth Advisors, Highline Financial Group, Exencial Wealth Advisors, Savant Capital and Stratos Wealth Partners, among others.

Too Many Firms Remain On The “Buy Side”
If we look at the RIA landscape today, the crowd remains tremendously unbalanced with significantly more advisors looking to acquire other practices than those who are looking to sell and exit the business. Advisors read the headlines and understand that their peers are aging, that regulation has increased and that the costs of doing business continue to rise, especially for the smaller advisory firms. Prospecting for retail clients is becoming increasingly difficult as competition for those clients continues to heat up, so many advisors see the acquisition of another firm as the best way to grow their business. Practice acquisition is a difficult endeavor, even for the most experienced, prepared and capitalized advisor, so other growth avenues must be considered beyond looking to buy a practice.