The industry’s total U.S. advisor headcount increased for the first time in nine years – by 1.1%-, according to the research “Advisor Metrics 2015: Anticipating the Advisor Landscape in 2020”, by Cerulli Associates.
“Many positive developments led to the headcount growth last year,” states Kenton Shirk, associate director at the firm. “From the advisor perspective, there is a heavier focus on teaming and onboarding rookie advisors into multi-advisor practices. Advisors are eager to hire junior advisors so they can refocus their own efforts on their largest and most ideal clients. There is also greater awareness and concern about succession preparedness.”
“While all of this recent growth has provided some positive momentum, the industry is still not in the clear,” Shirk explains. Although there was an uptick in the number of advisors in 2014, the projection is that the industry’s headcount will begin declining again in 2019 as advisor retirements increase.
“In 2020, we believe that modest headcount gains will be trumped by a sizable uptick in advisor retirements,” Shirk continues. “The industry’s headcount will begin to decline once again at an even more pronounced rate than in the recent years.”
To minimize the decrease in headcount, Cerulli recommends the industry begins laying a solid foundation to recruit and groom new advisors in the upcoming years.