The Advisor Shortage Is Real: Why Firm Owners Need to Rethink Recruiting

By the mid-2030s, over 109,000 advisors will retire, accounting for 37% of the industry’s headcount. With more than 10,000 advisors retiring each year, hiring simply isn’t keeping up. In fact, Cerulli’s most recent report found only 2,706 net new advisors entered the field in a recent year. Even scarier? The industry still has a 72% failure rate among new advisors.

The Shift in Leverage Between Candidates and Hiring Firms

I’ve personally seen a huge shift over the past decade as firms work to do better — offering salaries to entry-level candidates and paying for continued education. But is that enough to keep up with such staggering numbers? The talent shortage in Kansas City alone has flipped the script. Firms that still recruit the old way (posting a job and waiting for applicants) are losing out to firms actively courting talent, or partnering with a recruiting firm like Chief of Staff. Gone are the days of 100% commission; even those coming straight out of school can now expect a guaranteed salary plus commission. Because only 15% of rookie advisors enter the field as their first career, and just 43% come from financial services backgrounds (Cerulli), it’s time to widen your candidate pool. McKinsey projects the industry needs 30,000 to 80,000 net new advisors over the next decade to keep pace with retirements and rising client demand, compared to only about 8,000 net new advisors added over the past decade. That’s a striking contrast, and it means firms can’t afford to keep fishing in the same small pond.

What Are Financial Advisor Candidates Actually Evaluating?

Financial advisors aren’t just looking at commission splits and compensation anymore. They’re looking for the same things other sales professionals in Kansas City seek: a flexible working environment (the ability to work hybrid or remote), a strong, ethically grounded culture, solid back-office support including re-papering services, and continued education paid for, including CE credits. Even smaller perks matter more than firms realize; things like technology stipends, flexible PTO, or a clearly defined team structure can be the deciding factor between two similar offers.

Does Investing in Education Matter?

There’s a well-known saying I’ve always resonated with: “The only thing worse than training  your employees and having them leave is not training them and having them stay.” When maintaining a CFP requires 30 hours of continuing education every two years (2 hours of ethics CE plus 28 hours of general CE, per CFP Board rules), it’s important advisors have access to CE credits. Advisors typically pay for these credits through specialized online education providers, industry associations, or major financial firms. Chief of Staff is joining that list this year. Our clients will have the opportunity to send their team to our event to earn CE credits at no cost. Be on the lookout for our CE credit luncheon this November,  open to financial advisors working toward their CFP renewal. 

With a 72% failure rate among new advisors, the onboarding plan matters more than ever. Partner with your internal HR team or bring in an external HR consulting service (Chief of  Staff has an excellent team of HR consultants, if you’re looking). Build a plan that doesn’t overload your current team but sets your new advisor up for success. We recommend creating an environment where rookie FAs feel comfortable asking senior advisors questions, joining meetings, and teaming up together. Continually evaluate your onboarding and training programs to make sure they’re truly setting new advisors up to succeed. For your seasoned advisors, create an easy-to-implement marketing plan that helps them bring over their book of business, along with a smooth re-papering process and clear guidance on your internal procedures. 

We won’t solve the advisor shortage overnight, so it’s time to adapt. Advisors will become more selective about who invests in them, and firms will have to prove they’re not only worth joining, but worth staying with. Want to see what that investment looks like firsthand? Reach out to reserve a seat at our November CE luncheon or contact us to learn more about how Chief of Staff can help build a recruiting and onboarding strategy that keeps pace with the shortage.

Written by Lisa Acree

Vice President at Chief of Staff KC

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