The US wealth management market is extraordinarily vast. The Bureau of Labor Statistics reports there to be 321,000 personal financial advisors (FA) working in the US in 2023 – and 55,000 new jobs will be created by 2033.

While all signs point to a steadily growing market, the changes brought on by technological advancements, the rise of RIAs and the aging workforce are stark.

So what does this all mean for the future of the US wealth management market?

The current state of wealth management in the US

The wealth management market is split into three distinct areas. The first is the wirehouses, including the likes of Merrill Lynch, Morgan Stanley, UBS and Wells Fargo.

The next category is regional firms, featuring names such as Raymond James, the Royal Bank of Canada, Stifel. Finally, there’s the growing independent sector along with boutique firms such as J.P. Morgan Securities, Alex. Brown, and Rockefeller.

I am also impressed with the rapid growth and recruiting success of the new Citizens Private Wealth business which is attempting to take advantage of the gap left in the market of First Republic Private Wealth Management.

What changes – and challenges – have we seen in recent years?

The exodus of financial advisors from wirehouses

The move away from wirehouses to smaller regional firms, boutiques and independents has accelerated in recent years, with registered investment advisors (RIAs) becoming the most popular destination for transitioning advisors.

According to Cerulli, while the four major wirehouses saw a 10% drop in FA count between 2012-2022, the RIA sector saw a 66% increase in that same period.

This trend has been burgeoning for a while. Today, advisors want more autonomy and less restriction in their work, shunning the regulations and interference of big wirehouses and banks to gain more empowerment, freedom and flexibility. Many “breakaway brokers” leave because they feel like they’re just a number at a big firm – some of which boast advisor headcounts of more than 15,000.

While these huge firms have the big name, money and history attached to them, they can be dragged down by draconian decisions, restrictive management and one-size-fits-all policies.

The appeal of smaller firms lies in the culture of empowerment. FAs who made the switch tell us their work is more streamlined and they can have a bigger impact, with more autonomy and influence and the potential for higher payouts. Similarly, smaller wealth management companies might be able to offer a more forward-thinking, disruptive strategy.

RIAs are becoming wirehouses’ Achilles heel

As more FAs flock to RIAs, these channels are on-track to controlling nearly one-third of advised assets by 2027, according to Cerulli.

There’s a very real possibility that wirehouses could lose the battle for market dominance in the coming years, with Cerulli going on to predict that RIA growth will cause Merrill Lynch, Wells Fargo, UBS and Morgan Stanley’s market share to fall from 34.1% to 27.7%.

When it comes to UHNW hiring teams and advisors from the major firms just look at the success over recent years of the ‘Super RIA / Multi Family Offices’ such as Cresset, New Edge and IEQ.

By moving to these types of firms these teams are satisfying their and their clients needs and desires to feel part of a smaller ‘Family Office’ style environment where their clients can benefit from the additional services that these firms can offer their UHNW clients. The equity that these firms offer these teams can also be very lucrative and appealing to some.

How technology is impacting the US wealth management market

Technology continues to reshape the wealth management market, with the increasing use of AI, machine learning and client service automation transforming the way advisors interact with clients. Online brokers and robo-advisors are gaining ground, too. It’s been predicted that by 2026, $2.1 trillion in assets will be managed by robo-advisory services.

But as technology continues to evolve and AI gets smarter, it begs the question: why should clients continue to use human advisors?

The answer to this lies in adoption and adaptation. Advisors who choose to work with technology, rather than against it, will be the ones who thrive in the future. 64% of wealth management firms have already committed to AI, recognizing its potential to transform investment advisory (56%), financial planning (50%) and customer service (41%).

The human, face-to-face element of wealth management cannot be replaced by technology, but it can be augmented and enhanced with programmes that allow for new, different and more direct methods of communication and advice. Those advisors who refuse to embrace technology may find themselves with diminished client pools in the ever-nearing future.

The greatest wealth transfer in history

One of the key challenges facing the industry is the generational wealth transfer. $53 trillion is expected to be passed from Baby Boomers to their children by 2045. This places significant pressure on wealth managers to adapt their services to meet the unique needs of younger, tech-savvy clients.

The Broker Protocol

The Broker Protocol, established in 2004 to enable brokers to switch firms while retaining their clients, has become increasingly challenging to navigate, with major firms like UBS and Morgan Stanley exiting in 2017.

This exit was supposed to slow advisor mobility between firms by preventing the transfer of client lists. But in our digital-first world, where the wealth management landscape is shifting towards more digital connections through platforms like LinkedIn, it’s easier than ever for advisors and clients to stay in touch, regardless of the protocol.

A new workforce is on the horizon

The wealth management workforce has looked the same for many years – but in 2025, that image may start to change.

The aging US workforce, particularly executive wealth management, is creating new pressures for employers and demand for the right advisors. The average age of a financial advisor in the US is 56, and 20% of them say they’re less than five years away from retirement.

We need more young advisors – and it seems they’re coming up, with 37% of the candidates taking the CFP exam aged under 30. But are firms prepared to invest in and train younger advisors? Those that do will reap the serious benefits.

Young advisors possess valuable experiences, particularly in the realm of technological fluency, adapting to new trends and connecting with modern clients. The latter is especially crucial when you consider that by the end of 2025, Gen X will control more wealth than Baby Boomers.

As the number of young investors grows, wealth management firms need to ensure they have the right advisors on board to capture these clients.

Moreover, the demand for diversity and inclusion in wealth management is intensifying. Firms that fail to adapt and diversify their workforce, particularly by bringing in more women and people from underrepresented groups, will struggle to keep up.

Which candidates are most in demand?

A good financial advisor with a good book of business will be snapped up by almost any firm, be that wirehouse or boutique. However, it’s the book of business that will be most scrutinized. Is it portable? Is it fee-based or transactional?

Those with the best books tend to be the ones who get the best offers. It’s still very much a candidate-driven market right now, with pressure on big firms, in particular, to stop their senior teams from making career moves into other firms.

Experienced, high-earning advisors control the market; they’re commission-based, bring their own teams with them and dictate where they go next. If they are not being looked after at their current firm, they will look elsewhere – although this decision to move is highly considered and treated extremely seriously.

Hanover’s strategy for US wealth management into the future

At Hanover, we are disrupting the US wealth management executive search market. With more than four decades of combined experience, our senior partners lead a dedicated team that understands the nuances of the US wealth management industry.

We believe the service proposition most recruiters offer financial advisors is – quite frankly – poor.

That’s why we take a service-based approach to the market, actively communicating with passive candidates on a regular basis. We frequently meet with advisors, most of whom are not actively thinking of making a career move. We foster these relationships and keep in touch so that when the time is right, we are on hand to help.

Our national coverage and willingness to travel to meet people sets us apart, with a team of highly experienced wealth management recruiters across the US. We’re proactive and targeted, going above and beyond to ensure we get in front of the market’s best and most employable financial advisors.

Reach out to Hanover US

If you have an interest in wealth management executive search and the services we can offer you, don’t hesitate to get in touch. Our team of consultants are on hand to support you, whatever your need. Let us be your agents and help you through the quagmire that is moving within the wealth management market. Contact us here to find out more.