Filed Under:Life Insurance, Life Planning Strategies

RIA advisors over age 55 have 33% of AUM

Advisors between the ages of 55 and 64 have the largest share of investable assets for all AUM brackets in the aggregate.
Advisors between the ages of 55 and 64 have the largest share of investable assets for all AUM brackets in the aggregate.

Advisors between the ages of 45 and 54 have the largest share of investments exceeding $500 million in assets under management, according to new research.

Cerulli Associates discloses this finding in a new report, “RIA marketplace 2013: The Changing Landscape of a Maturing Industry.” The annual report, in its third iteration, examines RIA practices, portfolios, products in use and drivers of growth.

The survey indicates that more than one third of RIA-affiliated financial professionals between the ages of 55 and 64 control 37 percent of $500 million to $999 million in assets under management. Similarly, RIA-affiliated advisors in this age group nab the largest share of AUM topping $1 billion.

Advisors between the ages of 55 and 64 have the largest share of investable assets for other AUM brackets except one: In the $250 million to $499 AUM bracket, advisors between the ages 35 and 44 surpass their colleagues at 28 percent of AUM, the report reveals. In the aggregate, however, advisors older 55 garner the largest share (33 percent) of AUM.

The average age of financial service professionals among registered investment advisory firms is 52. And nearly half of RIA- affiliated advisors are age 55 and older, the report notes.

“The average age of advisors in large practices is lower because they have made the investment to recruit and groom junior advisors,” the report states. “Many advisors hit an inflection point between $80 million and $100 million in client AUM when the size of their client base becomes untenable to manage, as these advisors are pulled in many directions.

“As such, their service delivery becomes reactive, and they have limited time for business development activities, which in turn puts a ceiling on growth,” the report adds. “Advisors at this juncture should evaluate whether a junior advisor could add additional advisory capacity and thus allow further growth.”

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