The financial advisory industry is suffering from hardening of the arteries, according to management consultant Mark Tibergian.
Indeed, the financial advisory business needs to rejuvenate itself with new faces, he said, because it's facing many challenges and contradictions.
Those were some of the comments of Tibergien, chief executive officer of Advisor Solutions at BNY Mellon/Pershing, at an FPA meeting on Monday.
It is becoming an older profession, with not enough CFPs, not enough new advisors, not enough women and not enough minorities entering it, he said. Yet these trends are taking place at the same time as when millions of Americans desperately need various kinds of financial advice and aren’t getting it.
“There’s an oversupply of clients,” Tibergien said at the FPA of Metro New York’s 20th Annual Forum in Manhattan. He also noted that, since 2008, there are some 40,000 fewer advisors.
Tibergien added that the industry comprises only 8 percent people of color and 23 percent women.
And the advisory industry is becoming top heavy at the wrong end, he said.
“There are more CFPs over the age of 70 than under the age of 30,” Tibergien said.
How does the industry reach millions of new clients who need their help? It must do it, he said, by more effectively utilizing existing staff and developing new members of the firm.
“This is one of the biggest challenges we have to attracting talented people to our profession,” Tibergien said.
One of the reasons for this problem is that most advisors entered the business to provide a service, such as managing investments, not necessarily to recruit, train and develop new people in the business, he said.
Tibergien said that, given the growth of the industry, the management of the average firm is now critically important. For instance, without more diversity, the average registered investment advisor could lose its assets.