The number of financial advisor employees has grown just 0.2% over the past decade, according to a recent report from Cerulli Associates. This is despite the industry's efforts to attract more people into the profession and develop the next generation of talent.

The Wirehouse channel is losing headcount at the fastest rate, although it controls over a third of the industry's assets. As of 2023, wires had a market share of 15% of the number of advisers. Cerulli predicts that this will decrease to 14% over the next five years, “mainly due to the profits achieved by RIA channels”.

The independent broker/dealer channel had the highest market share, at 16.5%, with the highest share of assets, at 12.7%. The independent RIA channel, which does not include hybrid RIA, had about 16% market share. However, that channel saw the biggest gain in asset market share over the past 10 years, growing from 12% to 16% in 2023.

“Broker/dealers must provide their advisors with flexibility and powerful technology to combat the shift to full independence,” Cerulli said in his report.

National/regional B/DS had about 16% market share of employees and assets, while hybrid RIAs had 13% share of employees and 11% share of assets. Insurance b/ds had the lowest market share of assets, with only 3%, but an employee count of nearly 14%. The b/di retail banking channel had 7% of assets and 9% of the number of advisers.

Across all channels, Cerulli reported $31.3 trillion in assets managed by retail advisors as of 2023. Over two-thirds (67%) of these assets were managed by practices with more than $500 million in AUM. About half of these practices are interested in an acquisition.

The research firm estimates that about 105,887 advisers plan to retire over the next 10 years, accounting for about 37% of the workforce and 41% of assets. However, 26% of those advisors planning to retire say they are unsure of their retirement plan. That rises to 30% of advisors when looking at the independent RIA channel alone.

“These advisors face a number of challenges related to developing a business continuity plan that is necessary for them to retire, including finding a qualified buyer for their practice (86%), structuring terms of agreements (63%) and the correct assessment of their practice. 53%), among other challenges”, said Cerulli in her report.