Rookie Financial Advisors in Short Supply, Survey Says

Rookie Financial Advisors in Short Supply, Survey Says

Constantly evolving products like new ETFs may exacerbate the problem.

Reviewed by: Lisa Barr
Edited by: Ron Day

Rookie financial advisors are in short supply and their numbers are dwindling, according to a recent survey that also offered ideas on how to boost recruitment.  

The industry added “just” 2,579 financial advisors last year, barely offsetting retirements, according to a survey from Boston-based researcher Cerulli Associates. Compounding the issue is that nearly three-fourths of recruits drop out before achieving full-fledged advisor status, the firm said. 

Financial advisors said the industry is failing to focus on inherent problems that are causing the shortfall. Those include things like training that puts sales above all else, a low bar for entry into the field, a lack of diversity that deters some from entering or staying in the profession and a paucity of training from firms in lead generation, an area of struggle for many new advisors.  

“The industry is still built on distribution of products and not execution for clients. New people get trained to sell a product, while trying to look like they are helping a client,” Matt Chancey, tax shelter and private equity consultant at CoastalOne in Tampa, Florida, told in an email.   

Making the situation more complex for fledgling financial advisors is the plethora of constantly evolving new products, such as variations of ETFs, mutual funds and other investment vehicles. 

“To help advisors succeed, firms across all channels must work to build a diverse talent pipeline and enhance rookie development programs,” noted Cerulli. 

Managing Small-Balance Accounts 

Cerulli recommended setting up structured training programs that help new financial advisors understand the business as well as how to service clients. Nearly half of rookies reported that their responsibilities include managing small-balance accounts for senior advisors, a situation that can go on for far too long and make developing their own client base a challenge. 

One organization, the CFP Board Center for Financial Planning, is working to increase the numbers of certified financial planners overall with an emphasis on a “more diverse and sustainable financial planning profession,” according to its website. 

Robin Giles said when she started in 2005, she was struck by the lack of diversity—few women and minorities. Although that situation has improved somewhat, other challenges persist, she said.  

“People who truly have a passion for bettering people’s lives financially don’t want to just sell products. This leads to a high failure rate.” Also, added the CFP at Apex Wealth Management in Katy, Texas, “There is not a clearly defined career path to becoming a financial advisor.”   


Follow Michelle Lodge on Twitter @lodgemich 

Michelle Lodge is a journalist who is a contributor to many sites: Fortune, Money, Time, Barron’s, Investopedia, and