It’s a combination that has attracted many top advisors and teams and is expected only to grow stronger in the coming year. Plus, the cherry on top is the industry-leading transition package they’re offering. Why? They offer the best of all worlds: The strength of a well-capitalized firm with a great reputation, plus a strong referral mechanism and robust lending capabilities, layered upon an entrepreneurial culture. And yet despite this disconnect, many advisors are running toward bank-owned firms like First Republic, viewing them as “different” from other banks. One of the most common refrains from those at bank-owned firms is, “I never want to work for a bank again.” Ultimately, the entrepreneurial thinking of wealth management and the conservative mindset of bankers just don’t mesh. Many advisors have negative feelings about working for a bank, but they’re embracing exceptions.But most firms are only selectively interested in less productive advisors. We emphasize “top” because deals for multi-million-dollar teams in growth mode are in the 300% to 350%-plus range, depending upon the firm. Today, transition packages being offered to incent top advisor movement are at near high-water marks. Recruiting deals will continue to be at high-water marks.Until Merrill shows signs that it’s better supporting its advisor force, this attrition is likely to continue. Plus, the question of whether Merrill will remain in the Protocol for Broker Recruiting still looms in the background-with many advisors opting to move sooner rather than later to take advantage of a less risky transition process. The push to sell bank products, circumvention of advisors by bankers, increased bureaucracy, a heavy-handed compliance culture, prohibitions on meeting clients face to face or returning to their offices due to strict COVID protocols-each exacerbates a discontent that Merrill advisors had already been feeling. In fact, Merrill has seen more attrition in 20 than Morgan and UBS combined. Generally speaking, Merrill Lynch advisors are the most unhappy out of all wirehouse advisors, and they will continue to change jerseys at a fast pace.Ultimately, big firms are leveraging the advantage of scale-and it seems to be working. Why is that? They credit the firms’ drive in focusing on more affluent clients, plus large investments in technology to improve operational performance. And interestingly, Cerulli recently reported that wirehouse advisors are by far the most productive advisors, averaging $175 million in assets per advisor. Morgan Stanley, UBS and Wells Fargo are kicking butt on many levels already and are particularly attractive to advisors who are looking for a change but want to remain in an employee model they are familiar with. Yet it’s the big brokerage firms that are coming back with a vengeance. Morgan, RBC and Stifel will continue to crush it. W-2 firms will unequivocally continue to pick up market share.įirms like Rockefeller Capital Management, First Republic Wealth Management, J.P.“Supported independence” is maturing rapidly and still has plenty of room to grow-particularly as more and more advisors look for faster pathways to independence. These models allow advisors to grow their businesses scaffolded by a turnkey infrastructure, top-tier technology, M&A support and access to transition capital. Firms like Sanctuary Wealth, Dynasty Financial Partners and LPL Financial filled the gap that once prevented many entrepreneurial-minded advisors from making the leap to independence. Independence will remain a very popular option, particularly among top advisors.Īs advisors demand more freedom and control, they will continue to vote with their feet and break away from traditional brokerages.Whether it’s because advisors will emerge from a post–COVID-19 world with a new perspective, or because their current firms frustrate them and push them to the brink, movement will be even more robust in 2021 than it was in 2020. That said, there’s a certain groundwork that’s been laid for 10 trends to emerge in 2021. And just as quickly as advisors rose to the challenge, so did the firms-particularly by way of expanding opportunities for advisors considering change.The events of the year have helped many advisors see their business lives in a new light, and they themselves are evolving positively for the new year.Advisor movement has been strong, and, overall, advisors are reporting their best years ever.As we explored in part 1 of this two-part series, despite the pandemic, the wealth management industry had some positive notes in 2020:
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