“Through tough times comes change, typically, and change doesn’t always mean good things for advisors, or it means they want to know what that change is going to look like,” she says. “They want to know who owns the firm that they are considering and is there any potential for that structure changing down the line. They want a stable environment where they can predict that they can be with this firm for the rest of their career.”

Papike says another common theme among advisors is that they are looking for help in putting together a succession plan. She points out that the average age of the advisor population continues to creep up. A report by Cerulli Associates noted that at the end of 2017, the average age of U.S. financial advisors was 52. “Advisors are looking at their environment and saying, ‘I don’t have someone to take over my business. I am looking toward my firm to help me put a succession plan in place,’” Papike says.

Succession planning, Diamond agrees, is one of the most pressing issues facing the industry. He argues that even for the best IBDs, once you get large enough “there may not be anyone who is large enough or sophisticated enough to buy you,” he says.

Because of the limited supply of those who can buy them, advisors then either sacrifice the quality of their succession planning or sacrifice the amount of money they can get for their business. Johnson says Securities America was proactive in providing access to information and consulting for advisors preparing to sell their businesses. When he went to Advisor Group, he found that it too had several resources and a program in place to help with succession and continuity planning.

In 2017, Advisor Group launched My Succession Plan, a platform that supports succession planning-based M&A transactions across the company. It also provides a sophisticated business valuation model coupled with expert consultants to assist independent advisors with this critical aspect of their business planning.

Steinmeier says LPL ensures that there are capital solutions available to help finance both the sellers and buyers of firms. LPL also provides valuation services to advisors so they don’t have to go out and pay third parties for an appraisal, he says.

Daniels says it is concerning that not enough younger people are joining the wealth management industry to fill the seats of aging advisors. “It’s a concern for any firm like ours, and I think it’s a great concern for my kids. Who is going to be the wealth managers that they get to turn to and help them with their financial planning?”

Daniels says he is surprised that more of the younger generations are not considering being in the independent space. “I think these younger generations do have a greater sense of altruism and of wanting to impact their world,” he says.

Cetera’s Stinson notes that his company continues to attract next-gen advisors into the profession through its national internship program, which was changed to a virtual program because of the pandemic. The first cohort from February through April had 122 interns; half of them were virtual. Another session, which ends in June, has approximately 200 students, all virtual, he says.

The lack of diversity is also a pressing issue facing the industry, says Steinmeier. “The diversity of the clients that are served are not necessarily met by the diversity of the folks delivering the advice, and I don’t think that’s sustainable,” he says. “So there is a big need in the industry to make sure we are supporting more diverse individuals coming into and becoming financial advisors or recognizing that it is a noble profession.”

Steinmeier says LPL has a diversity and inclusion council that is building communities, trying to be more representative of the firm and making sure there is a voice for people of all backgrounds. The firm also has an independent advisor institute that it uses to train new advisors and helps them to obtain licenses, and it has an emphasis on bringing diverse talent into that program, he says.

Raymond James has been tackling diversity both from the corporate and advisor sides, says Perry. She says the company has a women’s interactive network group, a black financial network group and a pride network group for financial advisors. “So, we are looking at historically black universities when we are doing recruiting for financial advisors, and many of our independent business owners are bringing in interns from the various universities,” she says.

“I think the mindset in 2020 at Commonwealth and my peer firms,” says Daniels, “is we universally believe there is space and a need for greater diversity both in terms of gender and race. But I don’t think that will happen overnight, and I think it’s incumbent on all of us, for the strength of the industry, and because I think there is going to be even greater need down the road to support women and minorities with financial advice.”           

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