Wealth management is a fickle field in which to work. Turnover is massive, but those that make the cut and build a strong book of business have longevity. Crazy longevity. So much so that the business could be flipped on its head in a decade.
A new report from the New York Times provides some interesting numbers that back up some of the anecdotes we’ve been hearing about the business. Long story short, it’s an old, old, old man’s game.
As few as 4% of all financial advisors working today are under the age of 30, according to the Times. The average financial advisor in the U.S. is over the age of 50, which is rather astonishing.
There are several issues that led to this problem. One: most every wealthy individual would rather invest his or her net worth with a grey hair than some kid in a suit. That will likely never change. Two: financial advisors with impressive books generally don’t want to retire, nor should they. Getting assets under management is the hard part. Earning a percentage of those assets each year is the fun part.
Compounding those issues is the fact that many firms have given up on their training programs, likely because they weren’t seeing an equitable return on their investment. One adviser told us that he came in with a class of 30 recruits. Three years later, he was the only one remaining. He bolted for a new firm before his fourth anniversary.
Banks are trying to stem the tide, though. Many are now offering base salaries to entice younger talent, rather than paying them a draw. We’ll have to wait and see what happens over the next decade as the octogenarians retire. Someone has to do the job.
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