We reviewed 5 years of 40 under 40. Here's what we learned

Every new year of Financial Planning's 40 under 40 list provides a unique snapshot of some of the top young financial advisors around the country. 

The list, a ranking of brokers under 40 years of age with the most assets under management, throws a spotlight on the potential of next-gen advisors, but it also serves as a reminder of the industry's broader shortfalls in retaining them.

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After the 2025 40 under 40 list came out earlier this month, Financial Planning analyzed the numbers from the last five years to see what can be learned from the leaders of the next-gen wave. Here's what we found.

A 20-year bull market has driven investments, and advisor AUM, to new highs. Firms will say "'Hey, the markets were up 30% last year, I got 30% new revenues. That's awesome. How smart am I?'" said Tim Welsh, the president of consulting firm Nexus Strategy, in a previous FP story on organic growth. "I'm like, 'Well, you didn't do that really. That was the markets.'"

Simultaneously, next-gen advisors stand to inherit immense books of business from an aging cohort of financial advisors entering retirement.

READ MORE: Top Merrill brokers credit firm's training program for career success

More than a third of financial advisors are set to retire by 2034, leaving behind an industry in which nearly three-quarters of newcomers struggle to establish themselves. With their departure, over two-fifths of client assets will be up for grabs, according to a report from research and consulting firm Cerulli Associates.

Young advisors find themselves in a favorable environment, but taking advantage of the current opportunities isn't a given, Waxelbaum said. 

"The inheritance is great, but, like we know in all inheritances, some people squander the inheritance and some people grow it," he said. "The people who are on this list are clearly the growers, not the squanders."

Merrill advisors on this year's list attribute much of that success to the firm's well-known training program. 

"I talked with people actually who were at other firms, even who went through Merrill's training program, and spoke highly of it," said Jens Pascucci, a financial advisor at Merrill who just ranked No. 1 on the 40 under 40 list for the second year. "And so that, to me, was a very strong recommendation."

READ MORE: Keeping the kids: An advisor's guide to retaining next-gen clients

According to Waxelbaum, some of that success may come down to simple demographics. Data on firm-level demographics is hard to come by, but Waxelbaum said that compared to other firms on the list, Merrill has the greatest share of older advisors looking to retire — a boon for younger advisors like Pascucci, who stand to inherit more ultrahigh net worth clients compared to his peers at other firms.

Transferring clients down the line isn't just a helpful leg up for next-gen advisors, Waxelbaum said; it's an imperative for the industry. 

"The industry solution to all problems over the next 10 years is, 'how well do we manage next gen?'" he said. "Because if we don't, all of that money is eligible for disbursement, and once you lose control, you can't look back."