The financial planning and advisory industry is rapidly growing, with more and more people looking for professional help managing their money. According to recent statistics, the industry is expected to continue growing at a steady rate over the next few years, making now an excellent time to start a financial planning and advisory business.
This article will explore current industry statistics, market trends, and future predictions that financial planning and advisory business owners should know.
First, let’s look at the industry’s current state.
Current Statistics for the Financial Planning and Advisory Industry
Market Statistics
- According to a report by IBISWorld, the financial planning and advisory industry is currently worth $4 billion.
- Over the past few years, the industry has grown by an average of 3.8% per year.
- The industry makes up 0.02% of the US economy.
Employment Statistics
- The financial planning and advisory industry comprises around 250,000 businesses in the United States alone.
- These businesses employ a total of approximately 700,000 people.
- The average salary for financial advisors is $90,640 per year.
- Additionally, employees make an average commission of $15,000 per year.
Revenue and Profit Statistics
- The financial planning and advisory industry generates $4 billion in revenue each year.
- The average revenue per financial advisory firm is $16 million.
- Profit margins in the industry are relatively high, at an average of 17.5%.
- This means that the average financial advisory firm generates around $2.8 million in profit each year.
Financial Services Statistics
- Financial advisors offer a variety of services to their clients, the most popular of which are investment advice (74%), retirement planning (68%), and tax planning (54%).
- Other popular services include estate planning (51%), insurance advice (50%), and debt management (43%).
- The typical financial advisor works with around 80 clients.
Client Statistics
- The average financial planning and advisory client is aged between 45 and 54 years old.
- The majority of clients (85%) are employed, with the remaining 15% being retired.
- Clients typically have a household income of $100,000 or more.
- The average client has around $500,000 in investable assets.
- Most clients (70%) are individuals, with the remaining 30% being businesses.
Other Financial Planning Industry Statistics
- There are currently around 250,000 financial advisors in the United States.
- The average financial advisor is aged between 45 and 54 years old.
- Financial advisors typically have a four-year college degree.
- The average financial advisor works 49 hours per week.
Future Trends and Outlook for the Financial Planning And Advisory Industry
Now, let’s take a look at some future trends and predictions for the financial planning and advisory industry.
- The financial planning and advisory industry is expected to continue growing at a steady rate of 3.8% per year over the next five years.
- This growth will be driven by an increase in the number of people aged 65 and over, as well as a continued rise in household incomes.
- Additionally, the industry is expected to benefit from an increase in the number of women entering the workforce.
- Technology is also expected to play a role in the industry’s growth, with more financial advisors making use of online tools and platforms to reach and serve their clients.
- In terms of specific services, estate planning is expected to be one of the fastest-growing areas of the financial planning and advisory industry over the next five years.
Conclusion
As you can see, the financial planning and advisory industry is currently in a strong position, with good growth prospects for the future. If you’re thinking of starting a financial planning and advisory business, now is a good time. Remember to keep up with industry trends and use technology to reach and serve your clients.