As many financial advisors who are part of the baby boomer generation inch towards retirement, a dire need for adequate and younger successors becomes incredibly important. The average advisor age is 50 years old with only 11.7 percent of advisors below the age of 35. The dearth of younger advisors is rather alarming considering close to a third of advisors who are planning to retire within the next 10 years have not established a clear succession plan.
Creating a pipeline of quality talent is imperative for older financial advisors. While many advisors recognize the importance of succession planning, many could still benefit by further educating themselves on mentoring, training support, compensation models and work/life balance expectations that are in line with the needs of potential successors, those of a younger demographic.
The need for fresh talent is imperative considering that $2.3+ trillion in assets are managed by advisors who are 60-plus, less than a fourth of financial advisors have created a succession plan and over a third of financial advisors have plans to exit the business within the next 10 years.
With these significant changes in mind, there are several key strategies to securing the next generation of financial advisors.
- Establishing next-gen priorities in the practice
- Creating the compensation structure which allows for growth incentives
- Upgrading technology that appeals to younger financial advisors
- Providing mentorship to support young advisors through collaboration with seasoned advisors
By implementing a well-crafted succession plan and identifying effective recruitment and retaining measures for younger advisors, soon-to-retire advisors can set themselves up for success and a smoother transition from their practice.