When it comes to building their advisory teams, wealth firms can either hire at the entry level and building from there, or lure over senior talent to build out their bench. And according to one piece of industry research, most of the action is happening at the bottom rung of the ladder.
In the Ensemble Practice 2025 Careers and Compensation data report, which drew on responses from hundreds of firms across the independent advisory space, just 1.5% of incumbent senior advisors were hired in the last 12 months, and 5.4% of those advisors in the level 3 position came on board in the past year. That's compared to 9.7% of service advisors, and a whopping 31.9% of associate advisors.
"Recruiting throughout the industry remains active and dynamic, but most firms rely primarily on talent development rather than purchasing skills in the open market," the report said, noting that turnover at the senior wealth advisor level is less than 6%. "For all positions, internal promotions vastly exceed the number of current employees hired from the outside."
While the report doesn't drill into the motivations driving the entry-level recruiting bias, Philip Palaveev, CEO at the Ensemble Practice, believes that bias comes down to culture and a preference for the familiar.
"I think advisory firms are very scared of compromising their culture by importing outsiders from other industries or from other parts of financial services. ... They prefer to hire people without experience and teach them 'their way,' rather than trying to absorb from the outside," Palaveev told InvestmentNews. "If they were a sports team, they would prefer to draft players rather than hire players in the open free-agent market. Realistically, most industries deploy a combination of both."
The clear benefit of growing your own people, Palaveev said, is that the firm gets fuller control of what they learn, their attitudes at work, and the way they approach clients. But that training process tends to be slow, with a lot of time and effort needed to help could-be leaders and rainmakers negotiate steep and often non-linear learning curves.
"With outsiders, you often import best practices – things you simply do not know or have never done before. You import expertise," he said. "Rather than waiting for someone to develop, you can just snatch [a senior advisor] out of a competitor and have that person immediately available. They can be more productive."
For many firms chasing growth, hiring at the senior advisor level can be a gamble; as recent high-profile disputes have shown, there's no guarantee that incoming advisors will be able to smoothly port over all their client assets. On the other hand, tapping external talent gives them more certainty about the kind of bench strength they're building.
"You can see the full track record of someone who has been doing this for 20 years, rather than someone you hired and then have to wait 20 months to find out if they are even going to stay with you," Palaveev said.
Dannell Stuart, president and partner at Santa Barbara, California-based Mission Wealth – which manages $13.7 billion in assets – says her firm's strategy builds ensembles intentionally "through a blend of homegrown talent and experienced advisors."
"We invest heavily in developing people at the entry and early-career levels, because that’s how we build consistency, culture, and long-term depth. We’re equally open to bringing in senior advisors when there’s a strong alignment around values, service philosophy, and teamwork," Stuart told InvestmentNews. "The goal isn’t to hire to a single profile; it’s to build well-rounded, durable teams that can serve clients exceptionally well today and for decades to come."
By developing advisors internally, Stuart said the firm is able to foster a "consistent, team-based, planning-first way of serving clients" supported by "a shared language, shared standards, and a deep bench of future leaders." Selectively hiring senior advisors, meanwhile, deepens the firm's bench of mentors while letting it "add immediate experience, perspective, and leadership, especially in moments of growth, geographic expansion, or when we’re adding new capabilities."
To be sure, rookie draft picks can cost much less than veteran free agents. The Ensemble Practice report found the average salary for an associate advisor in 2025 was $100,000, compared to $225,000 for an advisor at the senior level. That's not even counting the equity-based compensation and profit-sharing incentives that are par for course among senior advisors.
But based on disclosures shared by survey participants, the report found firms can assemble their sales and service teams within 29.6% of their revenues, allowing for high profit margins of almost 40%. To Palaveev, there's an obvious opportunity to redeploy those profits wisely toward recruitment.
"I think the industry can open up and recruit and hire more. It has the money," Palaveev said. "It is starving for talent, and it is still not hiring and recruiting enough talent."
Advisor demand isn't set to slow down in the next decade, and at least one widely shared projection forecasts a 100,000-advisor shortage within the next 10 years. Still, Palaveev said the wealth industry appears to be resisting the laws of classical economics, with advisory compensation growing at a dramatically slower pace than what the data would suggest. And despite their focus on training and promoting from within, he argued that firms aren't developing enough people to bridge the industry-wide talent gap.
"At the moment, there is a pervasive thinking that a dollar spent acquiring is perhaps better spent on training. That has to flip around," Palaveev said. "The smart organizations are doing both."
Stuart agrees, noting how Mission Wealth's hybrid approach supports its belief that clients are best served via a team approach.
"Advisors should never feel like they’re building in isolation," she says. "Teams create continuity, resilience, and better outcomes for clients and for advisors alike."
Elsewhere, a Commonwealth team in Massachusetts converts to Cetera, while Janney draws four former Wells Fargo advisors to its Radnor, Pennsylvania office.
Clients say he copied the boss on his emails - and now they can't touch their cash.
He wired millions to his own accounts and told investors the fund was winning.
The partnership arrives as most small business owners near retirement age still don't have a formal succession plan in place.
A spokesperson for the estate planning fintech cited AI's reshaping of the industry as Trust & Will restructures its business.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
