The financial advisor industry is aging. Despite efforts to recruit, FINRA statistics show that for every new advisor brought into the industry an advisor leaves the industry. A lack of recruiting coupled with a lack of diversity has kept the industry a fairly closed system. With little injection of new talent, the industry not only runs the risk of having few experienced leaders to drive the industry forward, but it also makes it difficult to create a pool of advisors representative of the populations they serve. In this white paper we look at the leadership cliff facing the financial advisor industry and outline strategies practice leaders can use to actively recruit and retain a diversified pool of successors.
The financial advisor industry is facing what many are calling a “succession cliff.” The majority of advisors are over the age of 65, which will lead to a wave of advisors selling and retiring over the next ten years. This creates an opportunity for financial advisory firms of all sizes to leverage inorganic growth through mergers and acquisitions. In previous years, advisors had to rely on personal capital and seller financing to secure acquisition deals. But a number of specialty lenders have entered the space, giving financial advisors access to capital and loan options they never had before.
In this guide, PPC LOAN teams up with successions experts, Advisor Legacy, to provide a comprehensive resource for both founding advisors and Nextgen advisors. The guide shows Nextgen advisors how to prepare for a leadership role and how to approach the founder, while demonstrating to the founder the value of Nextgen leaders and their role in the future of the practice.
During good financial times, positive revenue fueled by strong portfolios makes it easy to hide weak financial management within the firm. But those same financial mistakes and mismanagement which are unnoticeable in good times can mean life or death for a firm as cash flow becomes constricted due to fluctuating markets and unforeseen events.