Registered investment advisors have tightened their compensation plans and review more often, but training for junior advisors and succession planning are falling behind, according to DeVoe & Co’s latest talent report.

Many RIAs have become better at caring for clients but lag in investing in their own people, and the industry has a way to go in closing this gap, a new study shows.

Some 59 per cent of firms have a clear, methodical compensation plan, the highest level recorded by DeVoe & Co, the investment bank and consultant said in its 18-page study, Talent & Growth Report: Mind The (Development) Gap. Almost half of firms carry out performance reviews at least semi-annually, also a record.

“Career paths have begun to recover. The industry heard the warning, and many firms acted,” DeVoe, which tracks activity in the wealth management space, including M&A, said in its report. “But the systems firms have built are now running ahead of the people they are meant to develop. Only 10 per cent of firms offer robust training for junior advisors. Just 28 per cent believe their next generation is ready to lead. And a record 21 per cent are not even considering a succession plan.”

How RIAs and other wealth management models nurture talent, foster loyalty, reduce employee churn and keep clients satisfied is an important topic, given AI’s disruption of how the sector runs and the multi-trillion-dollar wealth transfer. Reports from organizations such as Cerulli Associates have noted that a significant number of advisors are in their mid-to-late 50s, raising the question of where the next cohort will come from. If firms cannot adapt fast enough, it raises risks that upcoming generations of HNW clients will fire them. 

Training
The DeVoe report said that only 10 per cent of firms describe their training for associate and junior advisors as robust and comprehensive. “In the four years we have asked, that figure has never exceeded 15 per cent, and the overall picture has hardly changed: each year, between 55 per cent and 61 per cent of firms offer only lightly structured training or none at all. After four years of flat results, it is time for change,” it said.

If only one firm in 10 has a robust program, that raises the question of how the other nine are developing the people they expect to become their next advisors, leaders and owners, the report said. In most cases, the answer is learning on the job, by shadowing a senior advisor for example.

“That approach shaped many of today’s founders, but it doesn’t scale, and it leaves development to chance,” the report continued.

A well-defined career path is once again the top request from next-generation professionals. Close behind it, at 42 per cent, is the natural next step on that path: a documented route to partnership or ownership. And 23 per cent want greater clarity on founder succession, up from 18 per cent in 2025.

Ownership
“Not every employee will become an owner. But ownership shouldn’t be reserved for advisors,” the report said. It argued that at many of the “best-run firms,” the top of every functional area, whether operations, finance, marketing or client service, leads to the shareholder table. “When a director of operations can see that path as clearly as a lead advisor, the firm widens its bench of future owners and gives its most capable non-advisors a reason to stay.”

Pay
“In our work with RIAs, we regularly see plans that are perfectly clear and poorly designed: built almost entirely on revenue, disconnected from the firm’s strategy or structured in ways that reward individual production over the health of the business,” the report said. “A clear plan built on the wrong metrics simply makes the wrong behavior more efficient. Employees are noticing. A quarter of next-generation professionals (25 per cent) say an improved compensation structure would do the most to advance their careers.”

Revenue still dominates as the main driver of compensation. New client revenue is a factor at 55 per cent of firms and total revenue managed at 54 per cent, both unchanged from 2025.

On performance reviews, the report said that a once-a-year conversation “leaves too much time between feedback and correction, and too much room for surprises at bonus time.”

“The firms that develop people best treat feedback as an ongoing conversation, not an annual event. This year, a record share of firms moved in that direction,” it said.

The report also said that “career pathing has become the most important people issue in the industry.”

For the second year in a row, a better-defined career path is the top request from next-generation professionals, cited by 45 per cent this year and 68 per cent in 2025. It ranks ahead of compensation, training and even a path to ownership.

On succession approaches, firms are moving in opposite directions. Firms already committed to a plan are moving faster, while a record share of firms has stopped considering one at all. Among committed firms, momentum has strengthened: nearly half (46 per cent) now have a plan in implementation or fully implemented. Among firms without a plan, intent has collapsed, with the share planning to draft one falling from 29 per cent to 16 per cent.