On Labor Day, a Look at the State of the Advisor Job Market—Slideshow

Morgan Stanley is taking the other approach: shedding advisors.

Three months after firing about 300 advisors, Morgan Stanley is poised to get rid of more lower-producing FAs—or "prune underperformers." In early March, it laid off between 200-300 lower-level advisors: lower-producing advisor trainees with three years or less of experience and $25,000 yearly fees and commissions, and those with five years or less of experience and $75,000 a year in production.

And Morgan Stanley may not be the only wirehouse that will resort to trimming advisors in 2011 and other aggressive moves to boost sales and overall financial results, other experts say. According to Elzweig, "It's no longer good enough for a new advisor to hit the ground running—they've got to hit the ground flying and at warp speed." Technology Closes Doors, Opens Windows

Popular wisdom: Increased use of software and Web platforms in today's advisory practices is performing many of the functions advisors used to hire junior advisors to do, leaving them with fewer jobs to fill throughout the industry.

Reality: Greater reliance on technology in the advisory world is creating more opportunities for young advisors than ever before.

Efficiencies created by digital technology do reduce the need for some jobs, but not the jobs young advisors are trained to do. Young advisors can now do much more in portfolio management, client management, client communications, financial planning, compliance and in the back office.

And they can hit the ground running with most platforms that advisors use, thanks to extensive technology training in many of today's collegiate financial planning programs.

People: The Critical Ingredient for Success

FA Insight's latest report on the advisor universe, The 2011 FA Insight Study of Advisory Firms: People and Pay, found that, driven predominantly by sustained appreciation in security markets, virtually all performance indicators for advisory firms trended upward in 2010.

In an article relaying the study findings in the September issue of Investment Advisor, FA Insight says that as firms grew again, so did their need for people, according to the report, with people-related costs increasing from 77 cents of every dollar in average expenses in 2008 to 80 cents in 2010. People will continue to be a priority in 2011, with the typical firm projecting to expand from 6.1 to 7.4 full-time equivalents (FTEs).

For advisory firms, people represent the critical ingredient for growth, according to FA Insight's Dan Inveen and Eliza De Pardo. Building value and effective succession planning are also critical. Achieving these objectives, however, will require firms to shore up weaknesses with regard to how they deploy and develop staff. Reflective of growing labor scarcity, compensation levels are on the rise again, retention is at risk and the source of the next generation of firm leaders is unclear.

A reminder that on Labor Day, and every other day, advisory firms' success starts with their people.