By Joe Mooney, Managing Director of Advisor Engagement and Enterprise Development
If you want to understand the moves advisors make in the independent space, you have to understand what advisors want.
The professionals who want to break from the wirehouse channel, or those who make a lateral move between brokerages or RIAs, tend to do so because they have specific needs that aren’t being addressed. I have spoken with a lot of advisors who made these decisions for themselves over the last several months. Learning what motivates them to seek change helps my firm grow as a business and helps them grow as financial professionals.
At a high level, the folks coming out of the wires want autonomy and flexibility. It’s a pretty standard talking point by now – breakaways want the freedom to choose the products and services that meet their clients’ needs without the constraints set by the mothership. But it’s still true. Technology is often a part of this conversation. The advisors I talk to chafe at the limits of their tools, or resent the way they try to hold client relationship data captive within their tech ecosystem. But they aren’t always aware of their specific alternatives.
That is, someone in the wirehouse world may not yet know to ask for tech providers like Black Diamond, Pontera, or Practifi by name. Instead, I’ve found it helps to start conversations by asking, “What capabilities are you looking for? What do you wish you could do for your clients?” Whether the advisor is in conversations with an RIA or an independent broker-dealer, these questions help pinpoint the advisor’s specific goals.
Details matter. Ironically, one of the biggest hurdles I hear from advisors looking for independence is the word “independence.” Recruiters use the word so much that it has almost lost its meaning. Is it “independence” if your website is made from a narrow range of cookie-cutter template options, or your canned market commentary is identical to everyone else’s? Wirehouses are not the only channels that hold data hostage as a means of client retention. I truly believe that there are better ways to build trust and retain advisors than trying to build an environment as restrictive as the one that they just left.
Generally, the advisors who are shopping around for independence in 2024 want more from RIAs and IBDs than platform discounts that come from scale. Those are nice, of course, but they want to feel like their new affiliation is invested in their success. In some cases, that is literal. In our experience, mutual, shared equity participation offers growth capital and demonstrates that success is shared. At any rate, it’s a lot more of a positive motivator to stick around than holding their client data hostage!
Of course, all of the support and technology won’t count for much if the people you work with do not have your best interest at heart. Our industry often struggles to define “culture fit,” but I find it helps to focus on how that culture is expressed.
To that end, advisors see culture fit in the level of support they get from the home office and the broader network of affiliated advisors. They often ask us, “What kind of voice will I have in decision-making?” Is there an advisory board? Is there a culture of problem-solving and collaboration, or is it everyone for themselves?
I find that it really helps these advisors when they are invited to the home office. Anyone can make promises, but the ability to see your support team in-person, and understand their roles in transition and ongoing operational support, gives them a great picture of whether or not they will fit in. At a minimum, it will show whether the destination firm’s promises have substance, or if all the promised “support” is coming from overworked administrative staff trying to juggle multiple roles.
The beauty of financial services is that there is no single, “correct” destination for every advisor. Advisors have the flexibility to choose the service offerings and cultures that make the most sense for their own careers as entrepreneurs. All it takes is a willingness to closely examine your options.
