The Number of Financial Advisers are Dropping but the need is growing
The Number of Financial Advisers are Dropping but the need is growing. What does this mean for you?
With too few new financial advisers coming into the industry, the decline of financial advisers shows no signs of slowing. In 2015 a 2.4% annual decline in advisers, as advisers continue to retire.
The number of financial advisers in the United States fell by 1.3% — or approximately 4,000, in 2011, and will decline by another 18,600 over the next five years, according to global research firm Cerulli Associates Inc.
“The continual aging of the industry is not being offset by the influx of new talent,” said Tyler Cloherty, associate director at Cerulli. “The wirehouses are starting to train people again, but it’s just not enough to make up for the number of advisers retiring and leaving the industry.”
The independent broker-dealers will suffer an even more dramatic decline, according to Cerulli projections. Mr. Cloherty expects that they will lose 18,000 advisers by the end of 2016, an annual attrition rate of 5%.
So what does all this mean? With the decline of financial advisers / financial planners. The industry is also going through a very large growth. The financial needs of people are growing rapidly. The largest population ever, the Baby Boomers are growing rapidly and getting ready to retire. Over 10,000 Baby Boomers a day turn the age of 65 and this will continue for the next 19 years. What they do have in 401K plans has to move to another plan, because the government wants their taxes. And also the Baby Boomers cannot afford to lose any of their money so they have to move it out of a 401k into something safer. With the lack of financial advisers available this industry is going to find a huge shortfall of help.
That’s just one segment of the population. Then we have the Millennials Gen X and Gen Y. This group of the population will all pay into Social Security but never reap any benefits of it. Also the fact that pension plans are almost completely a thing of the past. For Millennials the Gen X and Gen Y the only retirement plan that they’re going to have is what they create on their own. But with the financial advisory industry shrinking the need for younger more advanced technology wise financial advisers is growing in Leaps and Bounds. This is creating a huge business opportunity for the next Generations. Also the fact that if there are fewer financial advisers to help this generation they are going to be stuck in a worse shape than the Baby Boomers are.
People are living longer, 20 years ago the average life expectancy of a male was 64 now the average life expectancy of a male if 74. That means that they are having to find ways to make their money last longer. Or they have to have Encore careers. If you’re looking for an encore career then the financial industry would be a great industry for you.
So one of the next large Industries with potential for massive growth for many years to come is the financial industry.
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