Johnathan Rickman | Blue Vault
RIAs and advisory firms that incorporate wealthtech into their operations will be better prepared to address a coming shortfall in the financial services workforce, recent reports say. Those that optimize digital tools will be more productive and will speed up the process of attracting the next generation of talent, according to respective reports from McKinsey and Company and Charles Schwab.
The reports characterize the advisor shortage as the bittersweet fruit of strong fundamentals underlying the current state of wealth management. “Demand for its [human-delivered] services continues to grow as Americans become wealthier and their needs become more complex,” said McKinsey in a February insights article, “The looming advisor shortage in US wealth management.”1
“We estimate that by 2034, at current advisor productivity levels, the advisor workforce will decline to the point where the industry faces a shortage of roughly 100,000 advisors,” the article added.
Schwab’s 2024 Benchmarking Study2 similarly cites growth metrics for top-performing RIAs as driving a need to “hire 70,000 new staff over the next five years [and] … retain essential employees.”
Both studies offer different suggestions for addressing the shortfall, with Schwab highlighting the importance of RIAs creating talent strategies that articulate company values and opportunities for professional development. But both cite wealthtech as a key factor in scaling — and staffing — up.
“Solving the advisor capacity challenge will require a deep rethinking of the advisor operating model,” says the McKinsey report. To help increase advisor productivity by 10 to 20 percent on average over the next ten years, as the report recommends, firms should adopt technology enabled by generative AI, with “a focus on value-add activities and removal of tedious, low-value tasks.”
The Robo-Advisor Will See You Now?
A key takeaway from Michael Kitces’ keynote speech at Alts Summit 2025 was that the financial services industry, like other industries, has maintained its core human element by adapting to changes in technology and differentiating products and services around those innovations.
The Schwab study puts this idea in similar terms: “Delivering high-touch service at scale isn’t just about automating wherever possible, it’s about identifying technology that can create efficiencies and help enhance the relationship” between advisors and clients.
Mutual fund giant Vanguard has also looked into this issue, finding in a 2022 study3 that “clients prefer emotional support from human advisors” over automated services — an interesting admission from a company whose robo-advisors are considered some of the best in the industry.4
Redefining ‘Personal Finance’
Perhaps no one knows the importance of navigating the “emotional complexity” of wealth management more than Tim Maurer, speaker, author, and Chief Advisory Officer at Atlanta-based advisory firm SignatureFD. Maurer, who applies the philosophy of behavioral finance in all three of his roles, says in a recent issue of Forbes that financial decisions are typically made on an emotional level. Thus, the best advisors “learn how to navigate the emotional complexity of our clients with the same degree of professionalism as we do our more seemingly rational analyses,” he said. 5
Maurer gave similar advice to the next generation of wealth advisors at an Alts Summit 2025 student session. In response to a question about whether advisors must also act as therapists, Mauer demurred but fine-tuned his answer by saying advisors are “masters of emotional space.” You can’t help a client grow their wealth and pass on their inheritance until you first learn what makes them tick, he said.
Artificial intelligence and other digital solutions may make us more productive and ready for tomorrow, but their usefulness depends on how well we pair them with the human touch. The trust that advisors generate through their ability to understand clients’ needs and interests can’t be replicated any other way.
References
4 https://www.morningstar.com/financial-advisors/best-robo-advisors
