The total number of financial advisors in the U.S. increased by 1.1% last year, the first uptick in nine years, according to a new report by Cerulli Associates.

Cerulli attributes the expected increase to firms’ planning for the future.

“There is a heavier focus on teaming and onboarding rookie advisors into multi-advisor practices,” says Cerulli Advisors associate director Kenton Shirk. “Advisors are eager to hire junior advisors so they can refocus their own efforts on their largest and most ideal clients. There is also greater awareness and concern about succession preparedness."

However, 14% of wirehouse mega teams say they are undecided about whether they will remain with their firms over the next 12 months, compared to 5% for all advisors across the industry. Big wirehouse teams are leaving their options open, an executive summary says in the Cerulli report, "Advisor Metrics 2015: Anticipating the Advisor Landscape in 2020."

Among other key findings in the report, almost 64.3% of wirehouse and regional advisors who changed firms in the last three years say concerns about the quality of their broker-dealer's culture was a "major" factor influencing their decisions to make a move.

On independents specifically, the report says 52% who are planning to retire in the next five years have streamlined workflows in preparation, and 45% have upgraded their technology. Cerulli says 43% of independent advisors preparing for retirement are working with consultants to make those preparations.

Another finding about independents who plan to retire in the next five years shows that 80% of them either have a written succession plan in place or plan to in the next 12 months. However, the number drops to 54% for employee advisors.

DECLINES VS. GROWTH

Between 2005 and 2013, the industry dropped 12.7% in total advisor headcount, according to Cerulli. However, 2014 saw an increase of more than 300,000 advisors nationally, from 305,610 advisors in 2013 to 308,937 in 2014.

Cerulli predicts modest growth for the next three years, but forecasts a return to a multi-year decline beginning in 2019 because of larger numbers of retirements.

"The industry's headcount will begin to decline once again at an even more pronounced rate than in the recent years," writes Shirk.

Recruiters see those numbers playing out in their day-to-day practice.

“I think it’s an indication that firms are aggressively trying to build their training programs,” says Danny Sarch, president of Leitner Sarch Consultants. Sarch says the increase is a positive indication that firms are willing to invest in the future as they recognize the demographic challenge of an aging advisory force.

“Those statistics make good sense,” agrees Mindy Diamond, president of Diamond Consultants. “We talk a lot about the aging financial advisor population, and with the succession crisis comes the need for a lot of senior advisors to tap their next generation.”

Diamond says concern about the future has led many older advisors she knows to turn to younger talent in their own families.

Sarch says he thinks the modest increase in hiring is likely to continue for the next few years, but says that difficult markets could have an impact. “Historically, during bad markets, the firms stopped training outright,” he says. “That could throw their predictions off.”

Read more: