For the past decade, those of us in the financial services industry have been hearing of a looming financial advisor-shortage crisis. The reasons for the crisis are three-fold: retiring advisors, an aging population, and not enough new talent entering the industry to offset the growing demand for financial advice. According to the U.S. Bureau of Labor Statistics, the need for financial advisors projects to grow 7 percent from 2018 to 2028, faster than the average for all occupations. While this is excellent news that the demand for financial advice increases, it presents a problem our industry must solve:

  • The number of financial advisors is sliding year over year, declining 12% since peaking in 2008.
  • More than one-fifth of advisors plan to retire or leave the business in the next 5 to 10 years. 
  • There are more CFP® professionals over the age of 70 than under the age of 30. 

-Source: CFP Board

COVID-19 has catapulted the need for financial advice, and more advisors, even faster than expected. Senior advisors anticipate increasing business from new clients looking to build savings for future emergencies, and CARES Act withdraws as recovery begins. This demand creates a suitabe time for advisors to bring in new talent to their practice. However, solving the on-going shortage of financial advisors must involve initiatives to welcome, train, and support those considering entering our industry:

  • Educating about our industry through university programs to entice and train new advisors.
  • A succession plan that benefits both the new and retiring advisors.
  • Training and development throughout the transition period.
  • Transitioning clients and AUM over months or years, not decades.
  • New FinTech platforms that support a new era of business- portfolio and practice management through enhanced integrations.

While the financial industry has encountered new trends such as ‘specialty’ firms, serving niche clients, and Robo-advisors platforms, it is digitization through PaaS providers helping advisors to scale. These advancements will make or break an advisor’s business if they fail to abandon their outdated technology.

The financial services industry has encountered profound changes over the past decade with many more to come. Boutique firms serving niche clientele, Robo advisory platforms, and the “digital experience” are just a few of these changes. A recent trend in technology delivery known as PaaS or Platform as a Service has promised to change the face of fintech now and into the foreseeable future.

At AdvisorPeak, we believe that the way to serve our industry effectively is by bringing it benefits. Benefits to the firms we serve by buying back time for what they do. That is the value a well-designed tech stack brings to your firm. Trading and rebalancing, tax efficiency analysis, firm billing, and so on, when deployed correctly operate like a well-oiled machine. When an aging advisor has the opportunity to grow AUM, reduce overhead, engage more clients, and bring on a junior advisor, only then can the industry shortage be viewed as an opportunity.

Let us show you how AdvisorPeak and its partners provide you with the features, benefits, and value to act on today’s advisor-shortage opportunity.