The job outlook for financial advisors in the coming decade appears very promising, with ample opportunities available nationwide. Forecasts from the Bureau of Labor Statistics indicate rapid growth in employment for financial advisors, surpassing the average occupation. Growth is concentrated in cities with robust financial services sectors, but positions can be found in almost any area. The increasing aging population seeking assistance with retirement planning is driving the demand. Most advisors earn an average yearly income of $95,390, though some earn above $200,000. Despite the potential threat from automation, individuals are likely to seek human advisors for intricate planning requirements.
Thank you for reading this post, don't forget to subscribe!If you are looking to expand your client base as a financial advisor, SmartAdvisor can assist in generating leads for you.
Expansion of Financial Advisor Employment
The Bureau of Labor Statistics projects the addition of 42,000 new financial advisor positions from 2022 to 2032, leading to a 13% increase in the total number of positions over the decade, from 227,600 in 2022 to 369,600 in 2032. This growth rate is nearly four times faster than the overall employment growth estimate of 3% for the same period.
This rapid growth will further enrich employment opportunities for both new and established financial advisors. On average, approximately 25,600 job opportunities for financial advisors are estimated to become available annually. Many of these are expected to have ample vacancies, as a large number of current advisors will retire and need to be replaced.
Factors Driving Demand for Financial Advisors
Various factors are fueling the rapid expansion of financial advisor positions. Most notably, as the Baby Boomer generation ages, more individuals will seek professional financial planning services to aid in managing retirement.
Another contributing factor is the decline in traditional pension plans. This trend has led to an increasing need for individuals to make their own choices concerning 401(k) plans, IRAs, and other investments to fund their retirement, thus creating demand for financial advisors.
Geographical Distribution of Financial Advisor Positions
Financial advisors are employed in all states and cities, including small towns and rural areas. However, certain locations offer more positions than others.
At the state level, California is projected to have the highest financial advisor employment with 32,670 positions in 2022. New York and Florida follow with 26,800 and 24,640 financial advisor jobs, respectively.
New York and North Carolina have the highest concentration of financial advisor positions compared to all occupations, with 2.94 out of every 100,000 jobs being for financial advisors.
In terms of metro areas, the New York-Newark metro area leads with 29,000 financial advisor jobs, well ahead of Los Angeles, which comes in second with 13,050 jobs.
Responsibilities of Financial Advisors
- Evaluating a client’s assets, liabilities, taxes, and goals
- Developing financial plans and investment strategies
- Advising on investments such as stocks, bonds, and insurance
- Monitoring portfolio performance and adjusting plans
- Educating clients on financial matters
Earnings of Financial Advisors
The average annual salary for financial advisors nationwide was $95,390 in 2022, with the top 10% of advisors in the most lucrative markets earning over $208,000.
Salaries also differ by job title and field, with securities and investment advisors earning an average of over $150,000.
Uncertainties in the Financial Advisor Profession
Similar to any forecast, the future outlook for financial advisors carries uncertainties. One such uncertainty is the emergence of robo-advisors, which are automated investing platforms. Nevertheless, most experts anticipate that individuals will still seek personal guidance from human advisors for complex planning.
There may be added complexity due to the expanding variety of financial services and investment products. Tax regulations are also continuously evolving, requiring advisors to stay updated on new developments. Financial advisors are also subject to heavy regulation, and there is a possibility of increased oversight or more stringent licensing requirements.
On the Ground Level
With the aging population and the shift to individual retirement accounts, financial advisor jobs are expanding rapidly. This profession offers a strong job outlook over the next decade. The financial rewards are also attractive, and the work can be done from almost any location. Individuals seeking assistance with financial matters, such as retirement planning, are likely to continue seeking advice from advisors, although changes in technology, regulation, tax law, and the increasing complexity of the financial world may pose challenges.
Strategies to Expand Your Financial Advisory Business
- Retaining existing clients is crucial, but you also need to allocate time to prospecting in order to grow your customer base. If you have limited time for cold calls or are still working on strengthening your online presence, SmartAdvisor can help improve your visibility and connect you with leads more efficiently.
- You can also leverage social media to extend your services to new clients. Digital marketing is an effective tool for engaging with your target audience and garnering greater attention for your business.
Photo credits: ©iStock.com/andresr, ©iStock.com/PeopleImages, ©iStock.com/SeventyFour
