Advisor headcount growth stagnates over decade

The financial advisor headcount has grown just 0.2% over the last decade to 283,137 as of the end of 2023, according to a recent report. This stagnation comes despite industry efforts to attract more individuals to the profession and develop next-generation talent. The wirehouse channel, which controls over one-third of industry assets, is losing headcount at the fastest rate. In 2023, wirehouses held a 15% market share of advisor headcount, which is forecasted to decrease to 14% over the next five years due to gains made by the registered investment advisor (RIA) channels. The independent broker/dealer channel currently has the highest headcount market share at 16.5% and the highest asset share at 12.7%. The independent RIA channel, excluding hybrid RIAs, holds about 16% market share in headcount. This channel experienced the most significant gain in asset market share over the past decade, rising from 12% in 2013 to 16% in 2023. National and regional broker/dealers, as well as hybrid RIAs, each hold about 16% and 13% in headcount share, respectively.

Advisor headcount trends and challenges

The insurance broker/dealers had the lowest asset market share at just 3%, but their headcount approaches 14%. Retail bank broker/dealers held 7% of the assets and 9% of advisor headcount. Across all channels, the report indicated $31.3 trillion in retail advisor-managed assets as of 2023, with over two-thirds (67%) of those assets managed by practices with more than $500 million in assets under management (AUM). About half of these practices are interested in an acquisition. The research also estimates that approximately 105,887 advisors plan to retire over the next decade, accounting for about 37% of headcount and 41% of assets. However, 26% of these advisors are uncertain about their retirement plans. This uncertainty increases to 30% among advisors in the independent RIA channel. These advisors face a variety of challenges associated with developing a business succession plan that is necessary for them to retire, including finding a qualified buyer for their practice (86%), structuring deal terms (63%), and valuing their practice accurately (53%), among other challenges,” the report detailed.