| Seasoned Financial Advisors Needed |
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| Written by Kenrick Chatman |
| Tuesday, 09 June 2009 15:14 |
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The current economic crisis has resulted in a decrease in assets under management and a decline in revenue for financial planning and advice firms. The crisis has also resulted in a decline of new potential revenue inflows into funds under advice due to an estimated decrease in discretionary income.
The current economic crisis has resulted in a decrease in assets under management and a decline in revenue for financial planning and advice firms. The crisis has also resulted in a decline of new potential revenue inflows into funds under advice due to an estimated decrease in discretionary income. Seasoned financial advisors are currently in high demand since financial advisor productivity (for spending more time reassuring clients) and industry profitability are projected to decrease. Seasoned financial advisors are in high demand since they are more likely to acquire new revenue inflows of funds from baby boomers seeking estate planning and retirement services and from new clients seeking better asset management. They are also more productive, have higher assets under management, and produce significantly lower training costs. Most importantly, experienced financial advisors generate large amounts of revenue from well established client bases by providing complex services to both high net worth and corporate clients - market segments that generate over 57% of the US financial planning and advice revenue. Factors such as retirement and industry recruitment cut backs in early 2000 have contributed to a shortage of seasoned financial advisors; although employment in the financial planning and advice industry has been growing. Thus consolidation has been taking place in this industry since acquiring advisors via acquisitions instead of hiring and training more inexperienced advisors (with fewer clients and lower assets under management) was more appealing to financial planning and advice firms. Recently, consolidation has also occurred to reduce costs via greater economies of scale due to the addition of teams (groups of advisors serving clients), call centers, and/or online access to advisory services. Since the fortunes of this industry are tied to the wealth of the population (which is expected to take time to recover), what else can firms do to control costs and overcome a shortage of experienced financial advisors during this period of declining revenue? DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Kenrick Chatman is a sales and margin growth expert who writes articles on industry analysis and business development. Feel free to read about other industries by visiting his industry analysis blog. Grab a totally unique version of this article from the Uber Article Directory |