Wealth management firms that bolster their workforce with three major skills will be better prepared to combat the looming talent shortage in the industry. By 2034, the wealth management industry is expected to face a shortage of around 100,000 advisors, according to McKinsey & Co. data, but there are ways firms can be proactive through training and hiring.
Sean Walters, CEO of the Investments & Wealth Institute, shared that advisors with strong judgement — rooted in behavioral finance and client experience — will be in demand, as well as talent with niche training and proficiency serving specific client segments.
“Judgment — being able to incorporate what a client needs into their advice, including from a behavioral finance standpoint,” will be paramount for advisors and a “macro skill,” Walters said.
Advisors with the second skill set, technical proficiency or certification in a specific area of advice, will give firms a comprehensive edge with clients, he added.
“Wealth management (firms) are going to have to build out their teams with competency, and not just with CFPs,” Walters said. That means some team members will have to maintain expertise in investment management, retirement management, tax planning, or retirement income planning, for example.
As clients come to advisory shops more informed, due to the plethora of financial advice available online, firms will need to be able to “stress test the information or bias” they arrive with. A comprehensive team, with training across advisory areas, can offer clients more depth of service, Walters said.
Advising Across Demographics
Lastly, advisors with behavior proficiency — the third skill set Walters highlighted — will be able to navigate the complex needs, varied personalities and family dynamics of clients, a skill required to manage multi-generational wealth.
Walters noted that IWI’s Certified Private Wealth Advisor (CPWA) program is the institute’s fastest-growing certification being obtained by advisors, as “firms are needing to serve clients with more complex wealth issues.”
“As clients grow their wealth, the complexities around that wealth grow, whether it’s estate planning, charitable giving or managing businesses,” Walters shared.
With the Great Wealth Transfer underway as most Baby Boomers have reached retirement age, more wealth practices are focusing on a multi-generational approach to extend their services to the family of clients, an April study by Nationwide Retirement Institute found.
Some 17% of advisors said their biggest concern related to the long-term sustainability of their practice was the age demographics of clients. Additionally, 25% of advisors said they were expanding their services to be more holistic, as opposed to focusing on investment-only advice, the report said.
Investing in Technology, Retaining Talent
The wealth management industry can also address talent shortage concerns head on by using technology to automate routine work and other operational duties, a report by retirement plan provider Human Interest found.
“AI is transforming advisor efficiency and client personalization,” the report said. “AI tools can reduce advisor workloads by 20%-30% through automation of routine tasks. With 85% of advisors already seeing AI as beneficial to their practice, early adoption is becoming essential for competitive advantage.”
Firms need to pick the best AI tools for their organization, taking into consideration their existing technology, training and compliance requirements, IT security and whether the return on investment aligns with costs and client satisfaction, the Human Interest report said.
Workplace culture will also play a crucial role in firms’ ability to retain top talent, the report noted.
In addition to investing in technology, leadership should create a working environment with clear communication and transparency, where advisors’ work is recognized. Today’s advisors increasingly value work-life balance and flexible work arrangements, the Human Interest report said.
AI’s Potential Impact
McKinsey’s 2025 research, which highlighted the looming advisor shortage in U.S. wealth management, also noted how generative AI could have a significant impact on advisor productivity.
Specific areas where AI-enabled tools could improve advisor output included: client meeting preparation, the creation of financial plans and proposals, investment research and automating some day-to-day operations, administration and compliance tasks.
“Chatbots and virtual assistants not only save advisors time on knowledge management; they also enable financial advisors to provide 24/7 client service, which can boost client satisfaction and engagement without increasing workload,” the McKinsey report said.
IWI’s Walters says that top talent will also expect to have a meaningful stake in their firm’s future to remain there. Firms can do this by providing equity ownership to their top performers, he said.
“Particularly in the independent RIA business model, if I’m a rising star and you’re not giving me more shares of equity in the firm, you’re probably going to lose me,” Walters says.
Wealth management firms should also be willing to invest in training their talent, including footing the costs of employees’ certifications.
“Some firms will say, ‘What if I pay for you to learn all of this or get this certification, and you leave?’ Well I say, what if you don’t and they stay? Because you should be investing in (their) knowledge. It’s a knowledge-based business,” Walters said.
Danielle Walker is a freelance journalist with 15 years of business reporting experience. She previously worked at Business Insider and Pensions & Investments, among other business publications. Her work has been published in the Financial Times, Barron’s and Chief Investment Officer. Danielle is currently based in Norfolk, Virginia.
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