After years of declining numbers of financial advisors, it appears that the problem has eased up. But when it comes to maintaining or building a bank-based investment program, that any relief may be temporary.

According to a new year-end report by Boston-based Cerulli Associates, in 2014, for the first time in nine years, the total financial advisor headcount in the U.S. rose by 1.1%. That’s good news after a nearly decade-long decline that saw the headcount fall 12.7% from 2005 levels.

Cerulli predicts that this trend of slow annual increases in advisor numbers should continue until 2019, when a long-term decline in numbers will begin as older advisors start hitting retirement age.

Bob Carr of Central Bancompany saw his top producers being offered attractive pay packages to jump ship.

The bank channel has one advantage in that the average age of its advisors is slightly younger than the average for all channels; but the caveat is that bank advisors also have the shortest average tenure in their jobs -- just 13.1 years, according to the Cerulli report. Moreover, for every eight advisors who leave the business, only three are hired to replace them -- an indication of the shortage of young recruits to the profession.

Meanwhile, the wirehouses and other big brokerages like Edward Jones are making generous offers to lure away senior bank advisors and their books, according to bank executives who say they feel the pressure to offer their senior advisors attractive succession/retention arrangements that include a hand-off of their book to a younger advisor.

“We saw our top producers being offered packages,” says Bob Carr, managing director of Central Investment advisors, a bank-owned investment program at Jefferson City, Mo.-based Central Bancompany.  “Many of them are 20-year veterans who are approaching 60 and thinking of retiring, and they’re being targeted. We quickly tried to develop a succession plan that would satisfy everybody and that wouldn’t cost anyone anything.” He says all six of the people in that age group among his program’s 34 advisors have already “bought into” the plan, which features a five-year handover with a declining share or revenue going to the departing advisor, beginning with a 70%-30% split with the replacement advisor. So far only one advisor, who is 70, has started the program, he said.

Catherine Bonneau of Cetera looks for bank employees with the right skill set to become advisors.

The other side of the coin -- finding new talent to bring into bank investment programs -- is equally challenging. With fewer young people choosing financial advising as a career, Peter Bielan, a principal at Kehrer Bielan, says it can be costly to attract an advisor. He says another less costly option is for banks to look inside their institution at people who are already dealing with bank customers, whether as tellers or loan officers, and offer to train them as associate advisors. These trainees would not be put on the grid right off upon earning their licenses, but would be given a salary for a year or two, he suggests. The problem, he cautions, is determining that transition year when the guarantee goes away, whether it’s year two or three on the job.

Catherine Bonneau, CEO of Cetera Financial Institutions, says developing talent inside their 400 financial institution clients has worked for them. Even during the financial crisis, she says they identified people who were mortgage lenders and "converted them into advisors." They already had the necessary interpersonal skills, she says, and understood clients’ needs and issues. "But as we turn now towards more holistic planning we need even more people because that kind of thing takes more time.”

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