8 Reasons why advisors are moving firms in 2017
8 Reasons why advisors are moving firms in 2017
We are hearing and reading a lot about how slow recruiting is during this current environment. Advisorbox however, is seeing substantial recruiting activity so far in 2017. Here’s the primary reasons advisors are telling us why:
DOL
DOL is one of the most commonly brought up topics by advisors over the last 6 months in our recruiting conversations. Most advisors we speak with want choice. They want to be able to provide both fee based and the BIC exemption. Leaders and lagers have emerged regarding DOL response. Regardless if DOL is repealed or watered down, the Fiduciary Rule has been an eye opener (good and bad) for many advisors about their broker dealer.
Guaranteed deals
Since DOL’s FAQ guidance on recruiting deals, firms across the board have lowered total deals. But there is the flipside. Now deals are fully (or mostly) fully guaranteed deals. Having a 270% fully guaranteed deal is more attractive to many advisors than a 340% deal where only 150% is guaranteed.
Monetize
Monetizing your business through a W-2 recruiting transition is typically more lucrative than selling your practice. A million dollar producer who moves firms a couple of times in their career can put away more than $5 million more for their own retirement than the advisor that just stays put for the next 20 years.
20,000+ DOW
Many advisors have had a strong run over the last couple of years. Recruiting deals are primarily based upon your trailing twelve months revenue and advisors are looking to “sell” at the top of the market when their clients are most happy and the recruiting dollars are the highest.
Move to independence
We haven’t seen the interest towards independence slow down. There have never been more options available to wirehouse advisors for independence. We are seeing interest in soft landing options where an advisor is indie but plugged into another indie’s office and utilizing their support infrastructure. We are also seeing interest from wirehouse advisors for independent options that have investment banking capabilities.
Succession
Most advisors know that almost 1/3 of advisors will be reaching retirement age within the next decade. Many of the targeted succession advisors we speak with don’t want to sell everything now, preferring to slow down and sell later. These turn into quasi-recruiting deals where the advisor moves firms, gets a recruiting package, and has their buyer in place to start selling their business to overtime.
Retention or recruiting contract expired
Many of the wirehouse retention deals are expiring this year and next. It’s human nature not to want to pay back a bonus you can keep just from staying put. We are having wirehouse advisors specifically tell us they are open to exploring options now that their retention deal is about over.
Culture
We continue to hear advisor complaints about firm culture. Whether it is not appreciating a bank culture or being owned by a bank, desiring a truly fiduciary platform, lack of support, the culture of compliance, or the local culture the branch manager embodies. There are too many choices for advisors to be at a firm they don’t fit in. Life is short, if you’re not happy with the culture at your firm why stay?