A new report released by Pershing LLC, a unit of BNY Mellon, suggests that while most wirehouses and independent broker-dealers recognize that their core advisors are aging and will soon need to be replaced, few have done much in the past three years to address the problem.

Thanks in large part to the moribund economy of the past three or four years, financial services firms have spent a disproportionate amount of their time trimming lower-producing employees -- most of which were of the younger and just-starting-out variety -- to parse costs and improve the overall bottom line.

Meanwhile, consolidation on all fronts, particularly by large banks, created some economic and cultural incentives for established financial advisors to leave large firms in favor of independent shops or to hang their own shingles.

But now that the economy is improving, firms of all sizes are now taking a closer look at how best to attract and retain quality advisors to take advantage of the incrementally improving equities market and investors' steady return to Wall Street.

In its follow-up to a similar study from 2007, Pershing's "The Race For Top Talent II" report found that the total number of investment professionals remains relatively unchanged over the past three years at roughly 310,000 advisors.

But the number of financial advisors 55 years of age older increased from 32% in 2007 to more than 36% in 2009, as clear a sign as any that younger advisors and reps need to be found and developed.

In this same period, however, investment professionals with less than $50,000 in annual production tumbled from 55% to 42% as many couldn't afford the luxury of patience for younger or less experienced advisors.

While a handful of firms have established new mentor programs and developed recruiting programs targeting young financial advisors and freshly minted college graduates, the majority are still counting on their seasoned core to deliver the goods for the foreseeable future.

"We don’t expect the ratio to change dramatically over the next few years," said Jim Roth, managing director at Pershing. "The advisor population is obviously aging, but we’re seeing a combination of recruiting and retention strategies to address this."

"We’re seeing customers implement mentoring programs between experienced advisors and their associates as a way to accelerate training and instill an appreciation for financial services as a career path," he added.

Along with incorporating new technology -- be it better and more comprehensive customer relationship management and trading systems or social media tools to cater to prospective younger clients, firms are also work to create an environment where the so-called hybrid advisor -- someone who is both an RIA advisor and a registered rep -- can flourish.

"The most exciting developments we are seeing that relate to attracting talent are from firms that are developing a value proposition that embraces the hybrid opportunity," Roth said. "We’re seeing significant growth and activity in this area."

In order to keep up not only with poaching-prone wirehouses and private banks, independent broker-dealers face plenty of competition within their own ranks as advisors are increasingly looking around for the best compensation and culture in which to ply their trade.

The study found that while only 2% of broker-affiliated investment professionals with more than $50,000 in annual gross dealer concession (GDC) said they would pick a wirehouse as their next employer, 47% indicated they would prefer another IBD as their next destination while 22% said they would either start or join an RIA.

Pershing's report determined that 1.2 investment professionals left the average IBD for every new one hired. And while 64% said they were "very unlikely" to leave their current gig, 12% indicated they were "somewhat likely" to depart, meaning that roughly 11,600 advisors are likely to leave their current firm in the coming year.

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