The industry has some retirement planning of its own to do: Advisors’ average age is just shy of 49 years old and 14% of advisors are over age 60. Combine that with advisors’ evolution from transactions to ongoing fee-based relationships, and broker-dealers have quite a problem on their hands, according to a new report by Cerulli Associates in Boston.
Aging advisors’ clients are more loyal due to advisory relationships, which is good. But it’s not so great for newcomers hoping to build a business because potential clients don’t jump ship as readily as they used to. Add to that outdated hiring and training practices by broker-dealers—“new hires are expected to start up their practices with little more than a cubicle and a phone book,” says the Cerulli report—and there isn’t much to recommend the industry to a newcomer.
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