A recent development in the financial-advisors-on-the-move dynamic is a shift from employment at independent broker-dealers to RIAs, or to even launching their own advisories. These financial advisors are joining wirehouse breakaway brokers' yearslong flight to independence.
"There's a very aggressive push from all different types of firms," recruiter Dave Glaser, president and managing partner of ECG Resources, says in an interview with ThinkAdvisor. "The competition is there."
Of course, payout remains a main motivator for making the leap. Glaser, whose executive search firm focuses exclusively on the wealth management arena, argues in the interview that "the competition comes down to client service because if a firm isn't taking care of their clients, it's very easy for someone else to come in."
Glaser, who launched his company in 1981, opines on how the industry, in an environment of significant change, is putting substantial effort into determining how to best serve today's clients, especially high-net-worth and ultra-high-net-worth investors.
He also reveals senior financial advisors' reaction to the growing trend of private equity buying into the RIA at which they work.
Here are highlights of our conversation:
THINKADVISOR: Please describe the advisor recruiting scene. Seems there's increased advisor movement among wirehouses, broker-dealers, RIAs and private banks.
DAVE GLASER: There might be a 5% to 10% uptick in actual movement but a much bigger increase in reporting the movement.
Thirty years ago, if there was 10% to 30% less movement, there was 50% less reporting of it. Now, as soon as a group moves from Merrill, for instance, that news is all over the place.
But the industry has evolved to the point where it's more acceptable to make a change.
As a recruiter, do you see more activity anecdotally? Are you getting more calls from advisors and firms?
No question. There's definitely more going on, a more aggressive push from all different types of firms. The competition is there.
What's a new aspect to this picture?
The client service side is taking a much bigger front-row seat concerning clients looking at value-added services.
If your advisor isn't doing a financial plan for you, somebody else can come in and say, "We'll do that."
So at the end of the day, the competition comes down to client service because if a firm isn't taking care of their clients, it's very easy for someone else to come in.
What's the biggest challenge for advisors when they move — or stay where they are?
Everybody is still trying to figure out what the market is: How do we best attack it? Who are the people that we need on our team to be successful, and how do we compensate them?
How do we look at that wonderful market that we want to go after? How do we service those high-net-worth clients? Are they looking for just investment advice? Or are we going to add on all the other wealth advisory services?
What's prompted so many advisors to move to RIAs or open their own?
Advisors at big firms are leaving and going to smaller firms that can do things more effectively for their clients. That's the big attraction.
Advisors at big firms are always coming to us talking about how difficult it is to get things done. It takes days or even weeks going through all those compliance hoops, they say.
But an RIA doesn't have as many [compliance] levels.
[Wirehouse] advisors get bogged down in [compliance red tape] and don't have time to call their clients and spend as much time with them as they want to because they're doing so much internal documentation.
Where does payout rank as motivation for an advisor to leave?
