The statistics paint a pretty bleak picture. The average financial advisor today is age 51, with nearly half (43%) over the age of 55 and therefore inside of a decade from retirement age. Conversely, the number of new junior advisors entering the workforce isn’t even close to keeping pace with the number of senior advisors exiting. According to Ernst & Young’s recently released The Next Generation of Financial Advisors report, each year there are two financial advisors qualifying for Social Security benefits for every new advisor entering the market.
Advisory firms have become incredibly top-heavy organizations. According to Michael Kitces, three out of every four U.S. practices currently have more lead advisors and partners than support and service advisors to work with them.
Exactly what does this mean for the long-term sustainability of your enterprise? Without a talented team of young advisors to eventually take over the reins, not only are you risking your firm’s future, you’re seriously jeopardizing your ability to monetize your life’s work. More importantly, you’re neglecting your fiduciary duty to your current clients.
With each client you’ve onboarded, you promised them (either explicitly or implicitly) that you’ll be there through all of their life’s transitions – helping to put their kids through college, preparing them for retirement and dealing with crises like illnesses or the death of a spouse/parent whenever they arise. However, if you don’t have a plan to ensure continuity of client care beyond your working life, that promise is rather meaningless.Read More