RBC's recruiting tear has netted dozens of new advisors this year, but the firm's latest initiative is aimed at juicing organic growth among its existing advisor base.
The regional brokerage firm unveiled a new practice management program is designed to provide personalized coaching and education to advisors and teams with the intention such efforts could boost growth.
"Recruiting is getting more complex and challenging," says Nate Angelo, head of wealth management consulting for RBC Wealth Management-U.S. "We are having our second year in a row of successful recruiting. But we know that long term that can't be the only way we grow. So organic growth has to be a big part, and this is a lever we can pull to make that happen."
To be sure, the firm's recruiting efforts have been successful in recent years. RBC has hired 73 advisors so far this year, according to the company. But organic growth has been a Holy Grail hotly pursued by a number of firms. Merrill Lynch, for instance, added new incentives and penalties to its 2018 compensation plan to spur its advisors to bring in more assets. That move follows recruiting cutbacks the wirehouse made a year ago.
At the same time, technology is changing the business. Competition has increased with the rise of robo advisors, putting greater demand on advisors to up their service to clients. Brokerage firms, meanwhile, have been adding new digital tools for advisors. That has altered the role that outside consultants have long played in advisors' growth strategies, Angelo says, because external experts don't intimately know RBC's technology tools and procedures.
"Sometimes it is hard to take an outside idea an implement it. That has become truer as RBC has invested more money into new technologies over the past year or so," he says.
RBC has more than 1,800 financial advisors and $336 billion in total client assets, according to the Minneapolis-based firm.
RBC began building out its new practice management program in December, hiring five new coaches and creating an online assessment consisting of about 350 online questions (the assessment is dynamic, and advisors don't necessarily answer all the questions).
The new program consists of one-on-one coaching and customized digital resources, allocated differently depending on which three tiers advisors are sorted into based on production levels.
Bottom tier advisors have access to online resources, second tier also have access to one-on-one coaching and the top tier advisors participate in what the firm dubs affinity groups.
"It's designed for 12 to 15 advisors or teams that we would consider a cohort," Angelo says, explaining it's intended to create a sense of community and learning from others in similar situations. "Think of law school. You enter into together with other students and graduate together."
The firm's approach makes sense to recruiter Mark Elzweig.
"Recruiting can be a successful strategy because instantly you're getting good people. But frankly, there aren't enough good advisors to go around. So, it makes sense that they want to focus on growing the practices of the advisors they already have," he says.
Coaching programs are also popular with advisors, especially those who are energetically pursuing growth, he says.
"It's one of the hallmarks of a successful advisor; they are always striving to get better," Elzweig says.
RBC launched the online portion two weeks ago and expects to have 90 advisors engaged in the process by the four-week mark.