Adviser pool continues to drain, losing 2% in 2013

But adviser ranks to grow slightly in near term, Cerulli says

Jan 22, 2015 @ 1:40 pm

By Liz Skinner

The total number of U.S. financial advisers is still shrinking, but the decline in adviser ranks may have hit bottom for now, according to researchers.

Financial adviser headcount fell by 1.9% in 2013 to 287,119 advisers, according to the most recent data from Cerulli Associates. The research firm estimates about 5,500 advisers left the industry and were not replaced by new recruits, even as assets under management grew by 13% that year to $14 trillion.

MetLife's elimination of about 2,111 advisers from its ranks in 2013 accounted for a 0.7% decrease in headcount for the industry, the Boston-based research firm said.

The number of advisers with banks, wirehouses, regional and independent brokerages and insurance companies all have declined between 1.5% and 3.6% a year since 2008, Cerulli said in its first quarter 2015 adviser edition of Cerulli Edge, released Thursday.

(More: Wirehouses challenged as retention deals fade)

Registered investment advisers and dually registered advisers both experienced a boost in headcount in recent years, but much of it is due to “adviser movement rather than new advisers entering the industry,” the report said.

The ranks of RIAs have grown by about 1.8% a year since 2008, and dually registered advisers increased by 9% a year since 2008. The channels represent about 10% and 9% of the nation's pool of advisers, respectively, Cerulli said.

“It's not surprising that the number of advisers is down in the bank and brokerage channels because of the momentum of advisers moving to the independent space,” said Mindy Diamond, an industry recruiter with an eponymous firm. “But it's surprising that overall adviser headcount is down.”

In a break from former estimates that the financial advice industry will continue to shed advisers at least through 2017, Cerulli researchers predicted “a slight” boost in headcount of 1% a year "going forward."

Those expectations are based on efforts researchers see at employee-based firms to reinstate training programs, and expectations that independent advisers will be hiring more junior advisers as revenue rises along with investment markets, the report said.

Additionally, only 4% of advisers are indicating that they plan to leave the industry in the next five years, it said.

However, further down the road the adviser headcount would again be set to fall if efforts to bring more advisers into the business aren't stepped up.

In five to 10 years, about 21% of advisers plan to retire or leave the business, Cerulli said.

0
Comments

What do you think?

View comments

Most watched

INTV

Schwab's Jeff Kleintop: Prep for volatility given China trade uncertainties

China could be considered a developed market in five to seven years , according to Jeff Kleintop, chief global investment strategist, Charles Schwab.

INTV

Young advisers envision a radically different business in five years

Fintech and sustainable investing are two factors being watched closely by some of the 2019 class of InvestmentNews' 40 Under 40.

Latest news & opinion

TIAA exits the life insurance business

The move is a big deal for RIAs, experts say, since TIAA was one of only a few insurers to offer fee-only life policies.

Advisers step up efforts to help clients manage student loan debt

As some Democrats campaign to wipe the slate clean, financial planners focus on limiting the amount students borrow.

Funding for Reg BI, other SEC advice reform efforts denied in Waters amendment

House likely to approve measure that effectively kills rule package, but it faces uphill battle in Senate

Wall Street lashes out at Sanders' plan to pay off student debt with a securities trading tax

Financial pros argue that a transaction levy will hurt mom-and-pop investors along with investment houses.

GPB paid B-Ds and reps steep commissions to sell troubled private placements

GPB paid commissions of 9.3%, or $167 million altogether, on the firm's private placements.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print