As the wealth management industry prepares to tackle a new and potentially very challenging year, more advisors than ever before are seeking counsel and clarity on the next phase in their careers.
At the same time, many wealth management professionals are craving greater independence and flexibility, and the aging of the industry is putting a spotlight on the closely linked issues of succession planning and attracting the next generation of diverse and dynamic talent.
This was the conclusion of a recent presentation put on by Fidelity featuring three advisor industry recruiting pros, including Jodie Papike, the president of Cross-Search; Ryan Shanks, the co-founder and CEO of FA Match; and Louis Diamond, president of Diamond Consulting.
The trio urged all advisory industry leaders to review their talent recruiting and retention strategies in 2023 — or risk being left behind in a rapidly evolving and increasingly competitive industry.
Massive Missteps
There has probably never been a time when more advisors were unhappy at their current firm and seriously contemplating a change in direction, according to the panelists.
"From my point of view as a recruiter, I can tell you that there are a lot of firms that are making massive missteps in how they are recruiting and retaining advisors," Papike warned. "They have not kept up their service levels, and so, many advisors are feeling like they aren't being supported or serviced at the level they need and expect."
Papike suggested the rocky markets have caused some hesitation among advisors who are contemplating moves, but if and as markets rebound, she expects today's accelerated pace of advisor transitions to pick up even more steam.
"In our experience, the market volatility has caused some people to sit with their unhappiness and avoid disruption to their business and their clients," she explained. "However, there is a ton of pent-up discontent that is just waiting to be acted upon."
The panel noted that advisory professionals were moving in all different directions, with established teams breaking away form legacy wirehouses, individual advisors moving among independent broker-dealers, and captive insurance professionals making the jump to join RIAs.
'Options Are Everything'
As Diamond emphasized, "options are everything to advisors right now."
"We hear advisors coming in all the time saying they have always been in one model, but now they are hearing about all these new potential business models out there with more autonomy and flexibility, and they are intrigued," Diamond said. "Many advisors want to find a home where they have more than one option in terms of how to run their business, so they can have room to evolve and change with their clients' expectations."
Asked if there is a standout model that seems to be getting the most attention, Diamond said yes, but there is also a lot of diversity in what advisors are seeking in a transition.
"The approach that is getting the most attention at this moment is what I call the 'supported independence' model," Diamond said. "It's a model where the advisory professional can achieve independence without having to tackle all the things that a small or midsize business in America has to do to get off the ground running."
As Diamond noted, most advisory professionals who have worked in a larger firm might be great at their core job, but they don't know the first thing about procuring real estate, building and operating a website, setting up a 401(k) plan for their own staff and so on. And they also want help with the actual transition of their book of business.
"So, we are seeing real recruiting success at firms that can provide a turnkey, white-glove transition offering," Diamond said. "The firms that are successful in bringing in top talent are the ones that can tell this transition story really well."
