Financial advisers are finally getting a little younger, but many are earning less, too, according to a new survey of advisers.
The median age of a financial adviser has dropped to 47 from 50 just two years ago, the TD Ameritrade Institutional survey of 388 advisory firms found.
At the same time, median compensation for lead advisers has dipped, falling an annual rate of 7% over the last two years to $168,050 in 2016, according to the survey released on Wednesday.
These trends are a result of the financial advice industry hiring more advisers out of college financial planning programs and increasingly giving them a revenue-producing, or client-facing role, at the firm sooner than in the past, said Vanessa Oligino, director of business performance solutions at TD Ameritrade Institutional.
Many firms are going this route because they're finding it too difficult and too expensive to recruit experienced advisers.
"Firms are changing their focus to look for those who are academically trained and have licenses, instead of concentrating on advisers with large books to bring over," she said.
Many advice firms are partnering these new graduates with more experienced advisers or having the younger advisers work on smaller accounts, Ms. Oligino said.
About 31% of advisers are targeting new college graduates for revenue-generating roles, while 62% of firms are seeking these young professionals to serve in support and administrative roles, the survey found.
Advice firms are increasingly adding new owners.
About 19% named new owners over the last two years, compared with 13% of advisory firms in 2015.
Succession planning remains a challenge.
About two-thirds of advisers still don't have an adequate plan for passing on their business when they retire, the survey of advisers taken in February and March of 2017 found.