Adviser numbers falling in US – Cerulli report
UK advisers may not be alone in fearing that their industry is shrinking, Cerulli research on the US market has suggested.
The 16-page report, The Cerulli Edge – Advisor Edition, found that the US adviser industry headcount had shrunk by 1.9 per cent in 2013, despite increasing its assets by 12.9 per cent over the same period.
But it said the number of advisers could increase in future.
It said: “Employee-based firms have reinstated training programmes and independent practices are now more likely to hire junior advisers as revenues increase with rising markets.”
The Cerulli report argued that, globally, independent advisory firms had struggled to recruit and train advisers because of a lack of large, centralised training programmes, and warned that a shortage was imminent because of an ageing industry.
It said: “Building a structured career path for junior advisers to grow into an advisory role slowly over time is key.
“Juniors can start in an operational capacity, assisting with client service enquiries. As they build industry knowledge and develop relationship skills with clients, they can shift to a paraplanner or investment analyst position, gaining exposure to advisory activities.”
It added that this could lead to juniors shadowing advisers before taking on adviser roles themselves.
However, in the UK, reports have suggested that the adviser population is decreasing because of regulatory changes such as the EU’s markets for financial instruments directive rules and, particularly, the retail distribution review.
In August 2014, an eight-page interim version of the Heath Report claimed the number of professional advisers in the UK had fallen from 38,750 in November 2009, when RDR was announced by the then-FSA, to 31,750 by January 2013.
However, it added: “Since January 2013, IFA numbers have improved as IFA practices adopt redundant banking advisers, so 33,000 is now the accepted number of IFA advisers.”
US financial advisers, 2013
| Number of financial advisers | Assets under management |
| 287,119 | $14.07trn (£9.4trn) |
Adviser view
Carl Melvin, managing director of Renfrewshire-based Affluent Financial Planners, said: “There are clear parallells between the US and here.
“An element of the UK situation is advisers leaving because of the demands of RDR. But it may help change us from an industry to a profession and help attract graduates.”
