Advisor headcount to decline through 2016
By National Underwriter
By Warren S. Hersch
The population of financial advisors is expected to decline through 2016, according to a new research forecast.
Cerulli Associates discloses this finding in the latest edition of “The Cerulli Edge: Advisor Edition.” The second quarter 2013 report explores trends impacting the recruitment, training and retention of advisors.
The report forecasts that advisor headcount will decline by a five-year compounded annual growth rate of -1.2 percent. The study pegs the number of advisors in 2016 at 298,000, down from an estimated 309,000 at year-end 2012.
“During the past year, advisor headcount has declined by 1.3 percent due to terminations, retirements and advisors exiting the industry by choice,” the report states. “Cerulli projects that advisor contraction will continue through 2016, with headcount falling by 18,600. With a shrinking pool of talent, retention of quality advisors will be at a premium and the costs of securing outside talent will inflate.”
While projecting an overall decline in the advisor population, the report forecasts significant five-year compounded annual growth rate increases in specific advisor channels. Among these are registered investment advisors, dually registered advisors and bank broker-dealers:
- 5.3 percent — Dually registered advisors
- 4.9 percent — RIAs (including dually registered)
- 4.7 percent — RIAs
- 1.5 percent — Bank broker-dealers
- -5.0 percent — IBDs
- -2.7 percent — IBDs (including dually registered)
- -1.5 percent — Insurance B-Ds
- -1.3 percent — Regional B-Ds
- -2.7 percent — Independent B-Ds
- -2.5 percent — Regional B-Ds
- -2.2 percent — Dually registered
- -2.2 percent — RIAs
- -1.1 percent — bank B-Ds
- -0.9 percent — Insurance B-Ds
- -0.8 percent — wirehouses