If you've received a letter or phone call about your financial advisor retiring, you may be scratching your head, thinking, "What do I do next?" For the last several years, the number of financial advisors has steadily been decreasing. In 2008, there were roughly 325,000 financial advisors. By 2014, that number decreased to roughly 285,000.

Financial Advisors are Retiring

With one-third of advisors falling between the ages of 55 and 64, the mass exodus is understandable. Not only are they nearing retirement age, but their departure could also be attributed to the new rules handed down by the Department of Labor and FINRA. It’s possible they just don’t want to take the time and energy to continue their education knowing their retirement is around the corner. Many see it as a great time to exit.

With more than 100,000 advisors possibly exiting the industry in the next 10 years, many people will be looking for a new advisor. In terms of supply and demand, those searching for a replacement may have quit the job. There are roughly 36,000 advisers recruited into the financial world's big firms every year. Of them, about 30,000 won’t last in the financial world. In fact, it's estimated that by 2020, there will be a shortfall of about 10,000 advisors. That presents a potential problem for those looking for new advisors.

Creating a Solution

As a result, many firms are now attempting to recruit young trainees. According to research, about 5% of current advisors are under the age of 30. Retirees may have to consider entrusting their life’s savings with someone with minimal experience, which, to those who have worked hard to amass their wealth, could be frustrating.

When I started in the industry, very few people outside of my family and some very close friends were willing to take a chance on me. It wasn't until about 10 years in that I finally started seeing my business grow. I understand why so many advisors leave the industry.

If you're nearing retirement or already retired, you're likely going to interview financial planners numerous times in your life, especially with the statistics mentioned above. If you’re lucky or perhaps an elite client, your advisor may choose to semi-retire and continue managing your money.

Tips to consider in your search to replace your retiring financial advisor:

1. They Have a Media Presence

Are they published? Do they run a blog or write for a national publication? Can you find articles or TV interviews, even locally, in which they have participated? If the answer is yes to any of these, then these advisers are probably a good place to start. As you begin the interview process, knowing that someone is putting him or herself out there is a trustworthy sign. You can scrutinize their work, thoughts, and results based on what they’ve said in the past.

2. They're a Certified Financial Planner™

Obviously, I may be a little biased on this point. However, it’s for a good reason -- here’s why: CFPs® are considered by many to be the top credentialed financial advisors. There's a governing board that oversees CFPs®, and that isn’t always the case for other types of credentials.

That board strives to maintain the four E's:

  • Education: The person you are interviewing has taken the time to learn and is continuing to better him or herself to better serve you.
  • Examination: Required testing means you know the advisor has been tried and proven in his or her abilities to handle real-life situations when it comes to finances.
  • Experience: You are getting someone who has already delivered for other clients.
  • Ethics: This person believes in the responsibility to operate in the highest standard of conduct.

3. They're Accessible

One of the biggest complaints I often hear from prospective clients is that they could never get in touch with their last advisor. This lack of accessibility can make you feel like just another number. If they're not accessible and offering customized planning, they may not be someone you want to work with.

4. They're Not Nearing Retirement

If you're looking to replace a retiring advisor, you probably don’t to want to replace them with someone near the same age. However, you might not want someone who is extremely young because they could be a novice. Trusting someone you consider to be a novice with your life’s savings could be more of an emotional roller coaster than you want to deal with.

5. They're Likeable and Trustworthy

The relationship will never work if you both are not a good personal fit.

Don’t worry if your advisor is retiring -- you have options. Don’t rush. Take your time and find someone who is the right fit for you and your goals. In doing so, he or she will continue to lead you down the path you started on with your previous advisor.