PARTING SHOT

Advisors should heed the Goldilocks story— serving the small, the large and the just right for our market today.

CKINSEY & CO. PROJECTS THAT THERE WILL BE A shortage of 100,000 advisors by 2034. Yet if you drive through any affluent suburb, it feels like there’ s an advisory firm on every block. Do we have an advisor shortage or too many advisors?

Or is this the Goldilocks situation, and we have just the right amount?

The reality is we don’ t have too few advisors. But we do have too few advisors doing the right kind of work and serving the right clients. And if we don’ t rethink our approach fast, clients and future advisors will continue running from the three bears’ house and into the woods screaming.

Most advisors and firms focus on a narrow segment of the American public: households with investable assets ranging from $ 1 million to $ 5 million, predominantly held in liquid securities and bonds, with a significant portion allocated to tax-advantaged retirement plans or IRAs.

Our industry, as a whole, is missing advisors at the upper end of wealth planning and at the lower end. If you visualize the advisor landscape as a standard distribution curve, the“ bulge” in the middle will represent the dense population of advisors serving clients with $ 1 million to $ 5 million in investable assets. But on the tails of the“ bulge” are the underserved, low-income clients just starting their financial journey and the ultra-high-net-worth clients needing complex, multidisciplinary advice. There are significantly fewer advisors in a position to help such populations. The industry has instead overconcentrated in the“ just right” segment, leaving the rest of the curve vastly underrepresented.

The real shortage appears when we look at each distribution tail. Many ultra-wealthy clients get subpar planning and advice because they find the need to split their wealth and advice among numerous advisors. After all, they cannot find tax or legal advice, trust options, and complex planning strategies at one firm. Shocking as it might sound, as you go up in wealth, there are not enough good advisors with the skill sets and tools needed to deliver the all-inone service you seek.

On the other hand, as you move down the curve, the situation is just as troubling. Most low-income or even middle-income households looking for financial guidance struggle to find an advisor willing to take them— simply because their net worth doesn’ t meet a firm’ s minimum requirements or they’ re not profitable enough to justify the time. These individuals often navigate student loans,

limited income, rising housing costs, and a lack of generational wealth without meaningful access to trustworthy financial guidance. Instead of helping people build wealth from the ground up, many advisory firms have defaulted into a“ manage wealth, don’ t generate it” mentality. As a result, entire segments of the population— often young, diverse and full of long-term potential— are being left behind.

If we don’ t rethink our approach fast, clients and future advisors will continue running from the three bears’ house and into the woods screaming.

The real advisor shortage lies within this gap— not in the number of advisors we have, but in how narrowly we’ ve positioned them on the curve. We also face a serious retention and representation problem. Most advisors entering the profession today still don’ t reflect the broader U. S. population in background, perspective or the markets they serve. It is changing, but we still have a lot of work to do. Even when talented students enter the pipeline, 70 % to 80 % of them leave with- continued on page 58

60 | FINANCIAL ADVISOR MAGAZINE | JULY / AUGUST 2025 WWW. FA-MAG. COM