There are 39,000 fewer financial advisors today than there were in 2008, according to research by Cerulli Associates. The primary cause? An aging advisor force has led to a wave of retirements. The Cerulli data indicate that more than half of current advisors are older than 55, and an additional 100,000 of them will retire in the next 10 years.
But these jobs are not falling into a black hole. The demand for advisory services remains strong. In fact, the federal Bureau of Labor Statistics estimates that that the number of jobs for financial advisors will increase by 27 percent over the 10-year period from 2012-2022, a growth rate “much faster than average” in the U.S. economy.
Advisor 2020 points to some of the factors driving the increased need for advisors.
- Baby Boomers entering or approaching retirement will need strategies for “decumulating” their retirement assets while ensuring that their financial, health care and other needs are met for upwards of 20 or 30 years after they stop working.
- The middle market, which makes up a large segment of U.S. households yet is significantly underserved in the area of financial services, presents a potentially lucrative market for advisors.
- Generation X, people born from the early 1960s to about 1980, “should account for more than 40 percent of household income” by 2020. Many of them were severely affected by the 2007-2008 financial crisis and are in need of assistance as they work to get back on pace for their own approaching retirement years.
The convergence of these trends points to growing opportunities for young professionals and those making mid-career changes to fill the ranks left open by retiring advisors.
NAIFA is in tune with the needs of these early-career advisors. The NAIFA Young Advisors Team provides networking, mentoring, and coaching opportunities. Additional resources help those new to the industry manage their practices or devise business plans. Young advisors also benefit from NAIFA’s political advocacy, which protects their businesses and profession from overly burdensome laws and regulations and provides opportunities for them to increase their political awareness and involvement.