Are the wirehouses really imploding or is that just the story being told?
Frank says the numbers point somewhere very different.
Frank opens by previewing his updated Wealth Management Insight Report, a 67 to 68 page deep dive into advisor movement. He explains why some industry reports overstate how many advisors move each year, since they count internal registration changes, acquisitions, roll-ups and terminations as decisions an advisor made. His report separates those out and focuses on real advisor decisions.
Then he gets into the data behind the wirehouse implosion narrative. Based on registration data through the end of September, about 9 percent fewer advisors left the wirehouses this year, while wirehouse recruiting of experienced advisors is down about 15 percent. Frank says wirehouses are not losing a war to independence, they are losing the recruiting war. Of the advisors who left a wirehouse or W2 firm, 57 percent joined another W2 firm, compared with 60 percent last year and only about 36 percent went independent. Frank names Raymond James, Janney, RBC, Oppenheimer and LPL's W2 channel among the firms winning those advisors.
Stacey adds that independence is not for everybody, as it may have seemed five years ago and flags what she calls an industry epidemic, a widening age gap. She points to firms that are not mentoring and training advisors in the 25 to 45 range while the average wirehouse advisor is in their late fifties or early sixties. Frank explains that wirehouses effectively shut down training programs for about a decade because of cost and dropout rates and leaned on teams instead.
Frank shares a story about a large advisor choosing between an independent firm and a W2 firm. After the full day of meetings, Frank told him he should not go independent because he did not get excited about opening an office, building a brand, or managing staff and would be happier as a practitioner. Stacey adds that Elite does not try to convince advisors who are not business-owner minded, calling it an identification process. The episode closes with Frank explaining why fewer advisors are starting their own RIAs, with more small firms rolling up into larger aggregators and his reminder to not fall for the noise and focus on the right move, not just the next move.
Questions answered in this episode include:
Are wirehouses really losing advisors to independence?
What percentage of advisors who leave a wirehouse stay in another W2 firm?
Why do wirehouse recruiting numbers matter more than departure numbers?
How do reports count advisor moves, and why can the numbers be misleading?
What is the age gap in the financial advisor industry, and why does it matter?
Is independence the right path for every financial advisor?
Why are fewer financial advisors starting their own RIAs and more rolling up into aggregators?
Key Highlights:
00:54 Introduction: The Wirehouse Exodus Myth
01:23 Inside the Updated Insight Report and How Advisor Moves Are Really Counted
03:31 Are Wirehouses Really Imploding
06:10 Why 57% of Departing Advisors Stayed W2
08:18 The Age Gap and the Missing Training Programs
14:47 Independence Is Not for Everybody
24:26 Why Fewer Advisors Are Starting Their Own RIAs
25:49 How to Get the Insight Report
Learn more about Elite and our resources:
Elite Consulting Partners | Financial Advisor Transitions
https://eliteconsultingpartners.com
Elite Marketing Concepts | Marketing Services for Financial Advisors
https://elitemarketingconcepts.com
Elite Advisor Successions | Advisor Mergers & Acquisitions
https://eliteadvisorsuccessions.com
JEDI Database Solutions | Technology Solutions for Advisors
https://jedidatabasesolutions.com
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Advisor Talk is a podcast by Elite Consulting Partners focused on financial advisor transitions, recruiting and long-term growth strategy.
