What is the average age of a wealth advisor?
According to various studies and publications, the average age of financial advisors is somewhere between 51 and 55 years, with 38% expecting to retire in the next ten years.
But one problem the sector is struggling to find a solution for is how to attract the next generation of advisers. In the 15 years I've worked in this industry - either giving regulated advice or writing about it - the average age of an adviser, which has always hovered around the mid-to-late-50s, has caused concern.
According to a TD Ameritrade Institutional study, which surveyed 405 advisory firms, the average age of an RIA owner is 49 years old, down from 52 in 2015. The number of owners who are 40 or younger is now roughly equal to the number of firm owners who are 60 or older.
Should I get a financial advisor in my 20s? Not every decision requires a financial advisor, but if you prefer to have someone to talk to about major financial decisions, or if you'd like someone to manage your assets, then an advisor may make sense for you.
| Age | Number | Percentage |
|---|---|---|
| 40-49 | 25,555 | 25.8 % |
| 50-59 | 21,896 | 22.1 % |
| 60-69 | 16,803 | 17.0 % |
| 70-79 | 5,430 | 5.5 % |
The average age of a wealth management industry client is around 64. Next year the average age will likely be 65. And the year after 66.
“Our industry is all about people and we need a diverse range of professionals to cater for a wide range of clients, so age should not be a limiting factor,” he says. There is nothing to prevent anyone of working age becoming an adviser based on age alone.
Financial Advisor Demographics
Over 60% of advisors are 40 years or older. Most financial advisors hold bachelor's degrees, often in business, finance or economics. About one in 10 advisors have master's degrees.
In 2022, the number of registered investment advisors reached 15,114. Why register? Registration as an RIA gives advisors an advantage in the job market. As with any licensing process, this registration keeps other less-qualified advisors from entering the job market.
Is financial advisor a stressful job?
How stressful is being a financial advisor? Being a financial advisor can be highly stressful due to the responsibility of managing clients' financial futures, market volatility, and the need to make crucial decisions under pressure. Stress levels can vary based on individual clients and market conditions.
Some traditional financial advisors have minimum investment amounts they require to work with clients. These can range from $20,000 to $500,000 or even more. Why? Because their fees need to cover their time and expertise, and managing smaller portfolios may not be cost-effective for them.
2. The Statistics: 80-90% of financial advisors fail and close their firm within the first three years of business. This means only 10-20% of financial advisors are ultimately successful.
The 80/20 rule retirement emphasizes the importance of focusing on actions that yield the most significant results. When planning for retirement, concentrate on the 20% of your efforts that will have the greatest impact on your financial future.
The wealthy also trust and work with financial advisors at a far greater rate. The study found that 70% of millionaires versus 37% of the general population work with a financial advisor.
Many financial advisers charge based on how much money they manage on your behalf, and 1% of your total assets under management is a pretty standard fee.
Peak earning years are generally thought to be late 40s to late 50s*. The latest figures show women's peak between ages 35 and 54, men between 45 and 64. After that, most people's incomes typically level off. Promotions favor younger people with longer futures*.
Most wealth still held by older Americans
For instance, people over 55 controlled about $74.5 trillion in wealth at the start of 2019. By July 2023, that percentage jumped 30% — to $97.3 trillion, or more than 10 times the wealth held by people under 40.
A high-net-worth individual (HNWI) is someone with liquid assets of at least $1 million. These individuals often seek the assistance of financial professionals to manage their money, and their high net worth qualifies them for additional benefits and investing opportunities that are closed to most.
Your 40s are rife with savings opportunities that set up what's to come in the decades ahead. A financial advisor can help you prepare for both your present and future goals.
Can you become a financial advisor later in life?
Transitioning to a career in financial advising at the age of 40 is a strategic move that holds numerous advantages. The journey showcases the importance of mindset, leveraging life experiences, and embracing the opportunities presented in the finance industry.
Here are the benefits being an older adult in the finance sector can bring you: You have more life experience and knowledge that you can apply to your career. You may already have a lot of connections. As long as you're willing to learn, there is no limit to the work you can do.
According to the U.S. Bureau of Labor Statistics, the median annual wage for personal financial advisors was $94,170 in May 2021. It means half of the financial advisors earned more than that, and half earned less. One in ten earned less than $47,570, while one in ten made more than $208,000.
An ideal candidate will be capable of laying out his experiences with wealth management and explaining how he will be able to apply them to his responsibilities on the job. What to look for in an answer: Experience in the financial services industry or as a financial advisor.
Fifty-three percent of investors aged 26 – 34 state that they work with a financial advisor because it was recommended to them, followed by not wanting the stress of investing on their own (39%) and not having enough time to manage their portfolio (37%).
