It goes without saying that the Covid-19 pandemic has changed just about everything the way we live, work, and invest. Advisors have found new ways to serve their clients, have become their own IT and client support departments, and many have discovered new workflows, routines, and practices that serve their clients better.
Covid has also brought sweeping change to the field of financial advisor recruiting. Moves between wirehouse firms slowed significantly as the pandemic changed the way advisors thought about their jobs and the way they dealt with clients, and many advisors realized, with increased independence, that an independent path was not only possible for them, but preferable. Read on to learn more about how Covid-19 has changed financial advisor recruiting — perhaps forever.
Wirehouse Advisor Recruiting Has Been Slowed
One of the first impacts of the pandemic was a significant slowdown in wirehouse advisor recruiting. According to InvestmentNews’ Advisers on the Move database, which tracks registered representative and advisor transitions, total moves of experienced advisers fell 24% in 2020.
This slowdown was largely explained by reactions to office closures and the confusion of the recruiting process. Gone were the days of home office visits for potential recruits, in-person client meetings, and cross-country travel, and wirehouses and wirehouse advisors had to find ways to adjust. Transition volume declined as the industry adjusted to remote work and tried to reassure uncertain investors.
As firms have adjusted to Covid-19’s changes to the way we live and work, many advisors will be staying remote, at least part time, changing the way wirehouses do business for the foreseeable future. A majority of those in the financial services industry said they want to work from home at least one day a week, with 35% seeking full-time remote work. And clients are on board as well — over half of clients, many of whom have become more tech-savvy in their own rights, have expressed that they are comfortable meeting with their advisors remotely.
These changes don’t just inure to the benefit of advisors – large firms that are comfortable with remote workers find themselves with a larger pool of available talent, and broader recruiting options. Long story short, advisors who settled comfortably into a remote work environment have more options than ever before.
Registered Independent Advisors Have Stood Out
Even in these uncertain times, the Registered Independent Advisor (RIA) option has attracted a disproportionate share of advisors, especially as the pandemic continues and advisors adjust to remote work and client contact. Even in 2020, as wirehouse moves slowed to a crawl, RIA transitions increased by 20%. RIA custodial firm LPL Financial continues to lead in net advisor acquisitions in 2021, while wirehouse firms continue to lead in net losses.
These moves are caused by a number of factors. As advisors settled into remote work, many discovered that they liked the increased control over their businesses and workflows. New and increasingly advanced technology and easier access to financial products make it easier than ever for advisors to explore independence. And RIAs have driven significant growth in the industry, with a number of moves prompting assets under management (AUM) growth at RIA firms.
Covid-19 has also changed the way investors invest, with online financial management becoming more mainstream. Clients — and potential clients — are moving online, creating opportunities for tech-savvy advisors to deliver sophisticated investment advice to clients in new spaces. Independent advisors can decide how to engage clients, including developing their own marketing strategies, customizing portfolios to meet client needs, and structuring compensation to best suit their business. Contrast this with wirehouse advisors, who can be limited by firm policies that limit the products and services they can offer, and restrict each advisor’s ability to market their business.
In addition, RIAs who want to maintain a brokerage business can avoid choosing between an advisor and a broker-dealer model. Hybrid advisors can offer services as an RIA while also maintaining a commission-based affiliation with an Independent Broker Dealer (IBD). Going independent has never been a more attractive option for talented advisors who are comfortable managing their own books of business.
Want to Keep the Conversation Going?
All of us at TERRANA GROUP welcome the opportunity to consult with you to determine the right platform for you going forward — one that satisfies your long-term objectives and is also best for your clients!
Over the course of nearly 30 years, we have helped facilitate thousands of professional placements for Advisors, with client assets transferring exceeding $67 billion dollars. We have completed placements in most every major city throughout the United States, while building deep relationships with the advisory world’s most sophisticated and notable firms — including Wall Street brokerages as well as most Regionals, Boutiques, Banks, Independent Broker Dealers, and RIAs. We have a broad knowledge of the deals that are currently being offered and will ensure that you are being presented with the offer which will be best for you.
Confidentiality, professionalism, and respect are protocol to our practices and beliefs; we handle each and every step of the placement process with complete communication, keeping you informed while making the process smoother from beginning to end.
We are proud to always be considered as a great asset by our clients because of our proven expertise, many years of knowledge, and acute attention to detail. Financial Advisor Recruiting Services are not all created equal; we guarantee that the TG experience for clients and candidates is always world class.
We are based in Chicago, with a nationwide reach. Let us know you are interested by contacting us today. To get the conversation started, email info@terranagroup.com or give us a call at 312.655.8380 today.
