US wealth manager headcount shrunk by 14,000 last year

The number of financial advisers in the US - including wealth managers, IFAs and bank and insurer tied advisers – is declining rapidly just as demand for their services increases, according to new data.

The ranks of brokers and investment advisers working at brokerages, banks and independent firms among others fell by almost 14,000, or 4.1%, in 2010, according to a Cerulli Associates report which tracks the movement of people and assets among US businesses.

Despite the overall decline, the Cerulli report suggests the four largest brokerages - Morgan Stanley Smith Barney, Bank of America's Merrill Lynch, Wells Fargo Advisors and UBS Wealth Management Americas - are losing advisers and clients to independent broker-dealers and investment advisers.

Industry-wide, the adviser population "hasn't been growing for some time, and its shrinkage accelerated in 2010," said Waldert, co-author of the report, quoted by Reuters.

The decline in headcount partly reflects an adviser population nearing retirement age, according to the report. It also reveals the shake-out of laggard brokers and advisers whose livelihoods have been hurt since the financial crisis.

Banks and other parts of the wealth management industry employed about 320,000 advisers as of the end of last year, little changed for seven years. By 2015, total headcount may fall by another 8,000 people to about 312,000 advisers.

"It raises questions about how the industry is going to take advantage of all the Baby Boomers heading into retirement, if firms don't have new talent coming in," Waldert said.