More than one-third of financial advisors are expected to retire over the next 10 years, putting almost 39% of industry assets in motion, according to a report by Cerulli Associates.
Overall, about 37% of today's advisors are expected to retire over the next decade; by 2023, the headcount of advisors is projected to drop off by 1.4%, according to the report.
Wirehouse (40.7%), independent broker/dealer (40.7%) and national and regional broker/dealer (39.7%) channels have the largest portion of advisors who are planning to retire and transition their businesses within the next 10 years, the report said.
But the report also pointed out that almost one-quarter of advisors across all channels who plan to retire in the next decade do not have a succession plan. Twenty-eight percent said they expect an advisor in their practice to succeed them.
At the end of 2017, the average age of U.S. financial advisors was 52, the report noted.
“While some progress is being made, the industry is struggling to recruit and retain advisor talent that is adequately prepared to inherit the businesses,” Michael Rose, associate director of wealth management at Cerulli, said in a statement. “In an effort to overcome this challenge, firms are boosting recruiting efforts to bring new advisors into the industry and revamping training efforts to improve success rates."
Rose added that B-Ds are working to create attractive succession options for advisors approaching retirement. “It will be increasingly important that firms operate successful training programs in order to attract and train qualified advisors, integrate these younger advisors within teams for whom they can serve as a pipeline of potential successor candidates, and operate effective business succession programs for retiring advisors.”