Why NextGen Advisors Are Saying No to Your Firm

The financial advisory industry is facing a serious talent shortage. The average advisor is now 57 years old, with more professionals working into their 70s than entering the field in their 20s. Nearly half of advisors expect to retire within the next decade, while 70% of trainees exit before becoming full-fledged advisors.

This crunch comes at a pivotal moment: an estimated $68 trillion in wealth will transfer from Baby Boomers to younger generations over the next decade. Gen X and Millennial investors are looking for advisors who reflect their values, embrace technology, and engage digitally. Firms unable to attract NextGen talent risk losing both advisors and clients to more adaptive competitors.

So why are young professionals turning down traditional firms—and how can you change that?

What NextGen Advisors Really Want

Contrary to popular belief, it’s not all about salary. Compensation matters, but today’s emerging advisors evaluate firms through a broader lens that reflects long-term career and lifestyle goals.

• Fair Compensation with Long-Term Upside
  NextGen advisors expect equitable pay and clear paths to ownership or liquidity events. This generation will be running client books for the next 20 to 30 years, so firms must clearly show how those advisors will share in the value they help create.
• Career Progression & Mentorship
  The CFP Board and other industry groups are urging firms to offer structured career paths. Young advisors want to know where their careers can go, not just in titles, but in meaningful opportunities to take on clients, leadership, and equity over time.
• Technology That Works
  NextGen talent isn’t interested in working at a firm where 80% of the technology budget props up outdated systems. In fact, 35% of early-career advisors prioritize AI investments above other technology initiatives, and nearly half cite social media marketing tools as critical to growth.
• A Digital Brand Presence
  Clients are changing, too. Research shows 79% of Millennials and Gen Z seek financial advice on social media, and nearly a quarter won’t even consider an advisor who lacks an online presence. Advisors who grew up digital-first know this intuitively—and they’re drawn to firms that take it seriously.
• Culture That Aligns with Values
  Younger professionals want more than just income. They want to work for a firm that values ethics, collaboration, and client impact. Rigid, siloed firms that resist innovation or downplay purpose quickly turn them away.

Where Firms Are Falling Short

So, what’s causing the disconnect? Traditional firms are stumbling in three big areas:

1. Technology Spend is Misaligned
   Up to 80% of firms’ tech budgets are spent maintaining legacy systems, leaving little room for AI, automation, or integrated platforms that younger advisors expect.
2. Culture Feels Outdated
   Many firms are still perceived as either “stuck in the past” or overly focused on short-term revenue. For values-driven NextGen advisors, that’s a red flag.
3. Client Service is Behind the Curve
   Less than 10% of advisory firms provide personalized, tech-enabled recommendations or automated services, capabilities that NextGen advisors (and clients) view as basic expectations.

The result? Innovative professionals end up looking elsewhere, often joining independent RIA platforms or tech-forward firms that better align with their vision of the future.

How to Become a Magnet for NextGen Advisors

The good news: firms can pivot and many already are. Here’s what the data says works:

• Adopt Team-Based Models
  Firms structured around teams are thriving. In fact, 94% of practices with over $500M in AUM use team-based approaches, achieving far higher growth and retention.
• Offer Flexible Work Models
  Post-pandemic, flexibility is non-negotiable. Nearly 70% of financial services employees say they’d leave if workplace flexibility decreased. Hybrid and remote-friendly options are now table stakes.
• Build Development & Coaching Programs
  The most successful firms don’t just hire talent, they invest in it. Structured training, business development coaching, and mentorship create loyalty while accelerating advisor growth.
• Create Equity Pathways
  Equity ownership is one of the strongest retention levers available. Firms offering meaningful pathways to partnership or profit-sharing stand out in a crowded market.
• Invest in Digital Presence & Technology
  Building a strong SEO strategy, creating authentic social media content, and embracing tools like AI for planning or client engagement signals to both clients and NextGen advisors that your firm is future-ready.

The Bottom Line

The advisory industry’s talent crisis isn’t going away; it’s accelerating. Firms that cling to legacy models will struggle to replace retiring advisors and lose clients to more adaptive competitors. But those willing to evolve have a clear path forward:

• Embrace team-based practices
• Offer flexibility and development
• Create equity opportunities
• Invest in digital tools and presence

The firms that succeed won’t just attract NextGen advisors, they’ll also capture the historic wealth transfer already reshaping client expectations.

The cost of inaction is steep, but the rewards of adaptation are even greater. The choice is clear: become a magnet for talent or watch the future of your firm walk away.