Every month for the next decade or so, a herd of boomers will be leaving work for the last time.
To be precise, the LIMRA Secure Retirement Institute estimates that 123,270 people will retire every month through 2025. And to put that into perspective: that's the equivalent of everyone who lives in Hartford, Connecticut, retiring, every month, for more than the next 10 years.
How can this not be fertile ground for retirement advisors, right?
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LIMRA's research shows that currently, only four out of 10 pre-retirees work with an advisor. Most of the people who do — 79 percent — say they are well-positioned for retirement.
That's an important stat for advisors, because when accounting for all pre-retirees, including the majority that don't work with an investment professional, more than half say they are not confident about their prospects for retirement.
The "confidence" numbers suggest that advisors are doing their job when they're asked to. That so many don't seek the services of an advisor means there is continued room for substantial growth in advisories across the country.
That potential for growth, however, may be encouraging advisors to hold on to their practices.
According to Schwab Advisor Services, merger and acquisition of independent RIA firms was healthy in the first half of 2014, but short of industry expectations.
"While we see consistency in M&A activity in the RIA industry, with strategic acquiring firms continuing to show their buying power, we are not seeing the spike in industry consolidation that many analysts have been predicting," said Jonathan Beatty, a vice president with Schwab Advisor Services.
Beatty said that the data shows that RIAs are in a good position to sell their firms, but that the attraction of owning and running their own business is keeping them away from the bargaining table.
The first half of 2014 saw 29 completed deals, with $32.6 billion in assets under management being acquired.
The average size of deals increased during the first half of 2014, reaching $1.13 billion in AUM traded, compared with $808 million in the first half of 2013.
The bottom line? New retirement advisors are likely to try to find clients among the employers, near-retirees and other good people of Hartford (and elsewhere) at some point, but they may not have much luck before the advisor down the street makes the decision to sell their practice.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
