It’s news to no one that the industry is shedding financial advisors. But the numbers highlighted in Cerulli Associate’s newest research provides a stark breakdown of the looming problem.
Within the wirehouses, about 2,370 advisors, or 5 percent, of advisors will retire or leave the industry within the next five years. Looking further out, Cerulli estimates 35 percent of the approximately 47,400 advisors employed at Merrill Lynch, Morgan Stanley, Wells Fargo and UBS plan to leave within the next ten years. That means by 2025, the channel will be down at least an estimated 16,585 advisors if nothing changes.
Putting it another way—the wirehouses will lose more advisors over the next ten years than were employed in the entire bank channel (14,332) in 2013.
But wirehouses shouldn’t be the only ones concerned—about 25 percent of advisors at independent broker/dealers and 30 percent of RIAs say they’ll retire or leave within the next 10 years as well. Total, all three channels (including the wirehouses) are set to lose almost 42,000 advisors by 2025.
Across the entire spectrum of the financial services industry, one in four advisors will depart in the next 10 years. Doing the math, that’s about 71,780 advisors who are set to exit in an industry where headcount shrunk by 1.9 percent in 2013. The numbers just don't add up to a healthy picture.