Financial Advisers’ Empathy Gap

Cerulli Associates, a leading financial services market research firm, projects that more than one-third (35 percent) of financial advisors will retire in the next 10 years. In its wake, the next generation of advisors will inherit roughly $6 trillion of advisor-managed assets. This begets a crucial question: where will the industry find this next generation of advisors? As it stands, only a quarter of today’s advisor population is under the age of 40, according to the CFP Board, and of this, a mere 10 percent are under 35, Cerulli reports.

Why is the industry experiencing this new talent shortage? Of the myriad obstacles, poor industry perception and a lack of necessary structure to engage and mentor promising young leaders are two worth noting. However, they can be overcome with a commitment to understanding millennial preferences in the workplace and investing in the necessary resources to inspire today’s brightest talent to choose financial advising. It’s an investmentthat will deliver significant returns for both advisory firms and their clients.

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Over the past century, life expectancy in the United States has dramatically increased, a fact that has profoundly impacted the financial security experienced during our golden years.

After World War II, the first generation of retirees were generally expected to live less than a decade after leaving the workforce. Now, the average American is living to be about 78.8 years old, and as a result retirement can last anywhere from 20 to 30 years, with some people spending more time retired than they did working.

That sort of longevity is wreaking havoc on the best of financial plans, particularly when combined with the rising costs of some of life’s most significant expenses.

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