What Advisors Who Switch Firms Are Really Looking For
There are two main categories. Some people are really looking for the right place to service their clients, and it’s not all about the money.
The other category is all about the money: “Who’s going to give me the biggest check?”
Has the proportion of the latter increased? If so, why?
Probably. It ties into reports by the media and blogs. When these moves were happening 20 years ago, not everybody knew about them. But now you know that this or that firm has increased their front-end payment for advisors coming in.
It’s out there for everybody to know: “We’re paying big dollars to bring your book over.”
Please comment on the fact that there are fewer new advisors coming into the industry.
We haven’t done a great job of building upcoming infrastructure. We’re way behind on that. We’re seeing a lot of people retiring and moving out, but we haven’t rebuilt the infrastructure with other people moving up. So there’s a gap.
To what extent are robo-advisors relevant to financial advisors moving to a different firm?
I’m not finding anything significant in that regard. Every firm has a robo platform. Advisors will just ask, What’s the firm’s platform? What are they offering? Am I going to be able to offer my clients a competitive type of platform?
How are advisors reacting to the trend of private equity buying into RIAs?
More and more senior advisors are calling me who have been with a firm for a long time saying that the whole culture has changed.
Before, they were part of leadership and making decisions; now, with the PE guys coming in, the culture has changed from teamwork and servicing the client to everything being all about the money.
There are very few times when I call somebody and they say, “Wow! We just had a private equity firm buy in, and things are really rosy!”
There are comp changes, leadership-style changes. It probably affects more of the tenured professionals and not so much the guy who’s on the way up and there for two, three or four years.
I’m sure there are scenarios where the firms are undercapitalized, and it’s beneficial. But I can’t remember anybody celebrating the fact that PE is buying in.
How would you describe advisors’ frame of mind right now regarding moving firms?
You have a segment that’s ready to go as soon as somebody cuts a big check for them — just put the money in front of them. That’s all they care about.
How do other advisors feel?
There’s a realization that if you’re moving every two, three, four years, your clients aren’t happy about it. They want to see job stability.
There’s been a maturing in the industry. Now it’s more like, what’s the growth opportunity? Is it too soon for me to make that move? How does it affect my career long term?
Describe your ideal client.
I like to see people who are thoughtful and strategic in their approach so that we can work with them on a long-term, career-building move.
We do a tremendous amount of repeat business and get a [great] number of referrals.
So I like to believe that we work in an advisory capacity with our clients: What’s in your best interest? Not, how are we going to make money off you?
