Financial advisor headcount has grown just 0.2% over the last decade, according to a recent report by Cerulli Associates. That’s despite industry efforts to draw more people into the profession and develop next-generation talent.
The wirehouse channel is losing headcount at the fastest rate, although it controls over one-third of industry assets. As of 2023, the wirehouses had a 15% market share of advisor headcount. Cerulli forecasts that this will decrease to 14% over the next five years, “primarily due to gains made by the RIA channels.”
The independent broker/dealer channel had the highest headcount market share, at 16.5%, with the highest asset share, at 12.7%. The independent RIA channel, which does not include hybrid RIAs, had about 16% headcount market share. However, that channel saw the biggest gain in asset market share over the past 10 years, rising from 12% to 16% in 2023.
“Broker/dealers should offer their advisors flexibility and robust technology to combat the shift toward full independence,” Cerulli said in its report.
The national/regional b/ds had about 16% headcount and asset market share, while hybrid RIAs had 13% headcount share and 11% asset share. Insurance b/ds had the lowest asset market share, at just 3%, but a headcount of nearly 14%. The retail bank b/d channel had 7% of the assets and 9% of advisor headcount.
Across all channels, Cerulli reported $31.3 trillion in retail advisor-managed assets as of 2023. Over two-thirds (67%) of those assets were managed by practices with more than $500 million in AUM. About half of those practices are interested in an acquisition.
The research firm estimates that some 105,887 advisors plan to retire over the next 10 years, accounting for about 37% of headcount and 41% of assets. Yet, 26% of those advisors who plan to retire say they’re unsure about their retirement plan. That increases to 30% of advisors when just looking at the independent RIA channel.
“These advisors face a variety of challenges associated with developing a business succession plan that is necessary for them to retire, including finding a qualified buyer for their practice (86%), structuring deal terms (63%), and valuing their practice accurately (53%), among other challenges,” Cerulli said in its report.