When it comes to being a financial advisor, the more experience—the more years you have on you—the better, right? Not quite. A new study shows that firms should be cautious when bringing aboard advisors heavy on experience.
According to new findings released by PriceMetrix, when all other variables are equal, advisors with less experience generally have greater future potential. The report showed that for every year of experience an advisor has, his future production was expected to decline by $12,700.
Although the report found that an advisor with five years experience is on a higher growth trajectory than an advisor who has been in the business 20 years, older advisors should not despair. Instead, PriceMetrix said that to improve their businesses and hiring, advisors should take the time to understand the factors that have the biggest influence on their future performance.
“While advisors obviously can’t turn back the clock on length of service, other factors—such as fee-based revenue, client mix and depth of client relationships—are within their control,” the report said.