"By 2017, the industry will shed more than 25,000 advisors, down to just over 280,000," reveals Sean Daly, analyst at Cerulli. "This reduction is largely due to retirement without sufficient backfilling of new advisors, and to a lesser extent, trimming of advisors with insufficient production. Headcount losses will accrue from the wirehouse, independent broker/dealer, bank, and regional channels."
Cerulli's most recent U.S. report, Intermediary Distribution 2013: Managing Sales Amid Industry Consolidation, focuses on financial products and distribution, including market sizing, advisor product use, and asset manager salesforces.
"The insurance channel accounts for the largest portion of the advisor population. The registered investment advisor and dually registered channels were the only sources of headcount growth in 2012, but together they amount to only 15% of the industry's advisors," Daly explains. "The independent broker/dealer channel experienced the largest marketshare change over the last few years."
After peaking in 2005, industry headcount has declined by more than 32,000 advisors. Losses were measured and dispersed by channel. The industry contends with an emergence of competition and underwhelming client demand, causing firms to lower the supply of advisors.
"Increases in productivity, made possible by improvements in technology, support services, and advisor training, have put distance between top advisors and the rest of the pack," Daly continues. "Advisor movement and client trends are projected to continue to favor the dually registered channel. The wirehouse and IBD (independent broker dealer) channels are expected to suffer market share losses."
Cerulli recommends that sales organizations within asset managers position themselves in front of large high-asset teams, and concentrate distribution efforts accordingly.