The future of wealth management hinges on how well the industry adapts to attracting, developing and retaining talent, especially as the next generation steps into financial services. As Cerulli pointed out, “The industry stands to lose 109,093 advisors, or 37.5%, to retirement over the next decade and 41.5% of total assets. On top of that, the firm estimates that there’s a five-year failure rate of around 72% for rookies.” Suppose firms want to remain competitive in a rapidly evolving landscape. In that case, the strategies they use to engage and develop this new talent must shift, starting with a fresh perspective on how we define “success” and a deep understanding of the diverse career goals of younger financial professionals.
One of the biggest challenges is many firms are still asking the wrong questions when it comes to recruiting and compensation. As George Nichols III, CAP, president and CEO of The American College of Financial Services pointed out during a recent session at Future Proof, it’s not just about enticing new talent to join—it’s about creating an environment that fosters long-term commitment and growth. Instead of focusing solely on how to attract young talent, the more relevant question is: how do we evolve as an industry to make financial services a career of choice for a new generation of professionals?
The answers lie in creating dynamic career paths, offering flexible work environments and embracing a culture-first approach that values innovation, diversity and personal development. Firms need to go beyond traditional compensation models. It is clear financial incentives alone won’t retain top talent; the adoption of strategic compensation will need to be considered and adopted, to not only attract rising talent but also to retain them. Today’s financial professionals are seeking purpose-driven roles, opportunities for leadership and a sense of alignment between their personal values and the firm’s mission.
In the same vein, mastering the art of hiring is essential. Building a scalable team requires much more than a transactional recruitment process. It requires a holistic approach to leadership development, ensuring every hire is positioned for long-term success and not just filling a role. As firms move further into the "middle space"—where RIAs, independents and right-minded banks thrive—these industry-wide shifts in talent strategy will dictate the future.
The days of battling between wirehouses and independents are behind us, as illustrated by the broader trends discussed in a recent Advisor Hub article titled "Wrong Question". Moving forward, the focus should be on how the middle is evolving to prioritize enterprise value, partnerships and equity that align with the next generation’s expectations.
In this new landscape, the firms that ask the right questions—about culture, growth and the value of their talent—will be the ones that thrive.
Lindsey Lewis, MBA, ChFC, CFP, is managing director and chair of The American College Center for Women, and co-chair of The American College Next Gen Advisor Task Force.