In an article for InvestmentNews, Gregg Greenberg discusses findings from Cerulli Edge’s latest report on the asset and wealth management industry. One of the most alarming takeaways is that there is a trickle of new advisors entering the industry with the vast majority failing to stick.
Overall, more are exiting the industry via retirement or quitting than entering. Last year, the number of advisors increased by only 2,579. And, the failure rate for newer advisors was 72%.
Due to these findings, Cerulli made some recommendations on how practices can attract fresh talent to the industry. Most new advisors enter the industry through referrals while lacking any sort of experience in financial services.
Thus, it’s imperative that firms have a structured training program that allows new advisors to learn the industry to gain confidence and experience. One of the barriers that new advisors face is the challenge of building their own client book. Thus, an effective training program should equip advisors with the skills and knowledge to successfully build their own book. It should also come with a natural progression from operational and support roles into production and portfolio management especially as compensation is tied to the latter two categories.
Finsum: The Financial advisor industry is facing a long-term challenge with a lack of new entrants into the field, a high failure rate, and a looming wave of retirements.
- advisors
- clients
- wealth management
- recruiting
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