I know something you don’t. I’ve seen this issue evolving over the last few years and want to not only expose the problem but also start talking about solutions.
The base case is that the average financial advisor is 51 or older and has been in the business for 20 plus years. They hold at least two credentials and on average, earn $134,000 or more. The industry is dominated primarily by males who make up 69 percent of the workforce and who stereotypically carry a “work hard, play hard” mentality. (Cerulli Associates, U.S. News, Forbes, Data USA)
Now take all of that information and throw it out the window. Too often, people make assumptions based on the numbers rather than what is actually going on. Statistics like this can paint an incomplete picture. One where we have an aging workforce, can expect massive exits from advisors over the next 10 -15 years, and that a successful career in this field must follows a certain pattern. But that’s just one small perspective, and like we tell our clients, past performance is not indicative of future results.
The problem with aging advisors is not that their time is up or that their approach is outdated; it’s that they are turning into clients. However, it’s happening in a very unexpected way. You know how we all eventually turn into our parents? We start to do and say the things they preached to us for years but didn’t exactly follow through.
A similar type of phenomenon is taking place with advisors as they try to figure out what to do next. They’re struggling with the transition from hard charging, successful advisor with all the answers to someone or something else. Just like their clients who have plenty of money for retirement, but don’t know what to do without their career or new goal to chase.
It’s a situation that is interesting on a number of levels. To start, I want to highlight how older advisors are turning into clients who are struggling with their changing roles. Recently, I received an email from a woman who had read a few of my books and articles. As you will see, her situation not only illustrates the complexity of getting older and making a retirement transition, but as you will see, mirrors what many older advisors are facing as well.
It seems that in my relationship I am no longer needed. I was an excellent corporate wife, an asset. I was a good stay-at-home mother raising two sons so my husband could focus on his career. Now that he’s retired, I am not needed as a corporate wife, and since the boys are adults, I am no longer needed to fulfill that function. My husband traveled a lot whether our kids were home still or not, up to the moment he retired. I was needed then as the person who ‘held down the fort’ at home. Again, no longer needed as he is here all the time now. My husband used to be proud of me, and happy about my performance, but no more. And of course, I’m not doing all those things he needed me for in our past. I have an active outside life, and healthy self-esteem there, but not as a wife. This can’t be so unusual, I guess.
Can you feel the heartache and pain in her words and see how a retirement can be an anchor around someone’s neck? Let me share another email I received from an advisor:
I’ve been doing this for over 30 years and I built one of the biggest practices within our BD, mostly one client at a time. Right now, my wife wants me to retire, but I can’t. I’m making more money than I ever did before, but I’m working less. Our office is a well-oiled machine and they don’t really need me for much. I’m actually going to the movies for the second time this week at 10 a.m. because I have nothing else to do and feel guilty sitting around there while everyone else works. I’m not really sure what to do, but I don’t want to retire and can’t keep hiding at the movies.
As you can see, both the corporate wife and advisor are struggling with their roles now that they aren’t needed in the same way. And what’s critically important is that they want to talk about it. They want to share what’s going on because they don’t know what to do about it, which makes it essential for our industry to hear these cries and find ways to remedy them. The situation also highlights something every advisor and client eventually figures out: Planning for and living a meaningful life isn’t just about money.