Slideshow Recruiting Trends for 2013

Published
  • March 08 2013, 1:17pm EST

Recruitment Trends for 2013

Competition for top financial advisory talent has stayed strong, but the kinds of advisors interested in moving has changed, according to the eight recruiters who gathered for On Wall Street's annual Recruiters Roundtable this year. Check out the key trends set to influence advisor movement in 2013.

Team Movement

"As in 2012, there will be more movement of major teams," said Mickey Wasserman, founder and president of Michael Wasserman & Associates. "These moves will shock the firms that they're leaving and shock the industry as well. We're going to see $3 [million], $4 [million], $5 [million] and $10 [million] dollar teams making moves in 2013."

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Wirehouses Stay Strong

"I think it's the same players as it always is," said Steve Rosen, co-founder of Rainmaker Associates. "You have the four major houses - Morgan, Merrill Lynch, Wells Fargo and UBS. From my end, there's been somewhat of a slowdown going into the boutique firms, the regional firms...I think the regionals had their best point when a couple of the major wirehouses were going through transitions and had problems. Now that a lot of those issues and problems have settled, that's slowed down."

Producing Managers Face Pressures

"The concept of a producing manager doesn't work," said Rick Peterson, president of Rick Peterson & Associates. "Brokers who work for a producing manager feel that the manager is going to steal all the accounts...Several years ago, we moved away from producing managers almost entirely with the major firms. It was basically because of compliance problems. The producing managers just didn't have the time to do everything expected of them, including produce, but also to do recruiting and all the other things involved in a manager's job. We're going to have the same problems with compliance that we had before because of their adherence to other issues instead."

New Models Make Waves?

"More models like HighTower and Dynasty will be born," said Mindy Diamond, president and CEO of Diamond Consultants. "In whatever form they are, they will figure out ways to incent advisor movement through transition packages to take some of the short-term sting away, to make it a turnkey solution, and to allow the advisor to offload the minutiae of running the business. The goal is to be more independent and have greater control, but not have to deal with the heavy lifting of the business."

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Lifting the Veil on Compensation Disclosure

"As far as disclosure goes, it sounds like it's going to be coming," said Michael King, president of Michael King Associates. "It's not going to be easy, and our job is going to be to counsel the brokers about it."

Firms Offering Multiple Models for Their Advisors

"I think they're at a huge advantage because they can offer one-stop shopping," said Bill Willis, president and CEO of Willis Consulting. "They can look at a candidate and say, 'How do you envision your business? You might want to consider this model and this model of the four or five we have to offer.' They are extremely well positioned in this time of choice. We're all experiencing that, where candidates want to look at not only different firms, but [different] genres of firms as they make their decisions. If one firm can cover all the bases, obviously they cast a wider net."

Training the Next Generation

"The aging of the sales force remains the big issue," said Danny Sarch, president of Leitner Sarch Consultants. "The wirehouses have older sales forces. They're not successfully training new advisors. Merrill's got a new program, but the jury's out about whether it's good or not. But by and large, new people are not coming into the industry. So we're all competing for the same pool. The firm that figures out how to use succession to appeal to younger advisors will be the winner."

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Consolidation in the Independent Space

"With the independent firms and the increased compliance that's happening and that's going to be happening, a lot of these places, although they're very large, have decentralized their compliance departments," said Carri Degenhardt-Burke, president of Degenhardt Consulting. "What that's going to do is create consolidation. There are going to be independents merging together to try to get ahead of this problem. But chaos amongst brokers that are going there and current advisors might influence people that would be interested in going there."