Compared to the first quarter of 2022, recruitment of financial advisors in Q1 2023 is down 16%. This shouldn’t be too surprising given the recent turmoil in the banking sector, concerns that the economy could tip over into a recession, and much of corporate America in belt-tightening mode. Devin McGinley in a piece for InvestmentNews dug into what the rest of the year should bring and highlighted some notable under the radar trends. 

It will be interesting to see the fallout from the regional banking crisis as it may compel some advisors to leave. For instance, many First Republic advisors have already or are expected to leave the firm following JPMorgan's takeover of the beleaguered bank. 

One bright spot has been growth in the RIA and independent broker-dealer space. In the first quarter, 261 advisors joined RIAs, while broker-dealers added 234 advisors which indicates that both are growing at a similar pace to last year. 

Clearly, the data shows that overall recruitment of financial advisors has slowed. While there could be a burst of activity with advisors leaving regional banks, the bigger story is the continued growth of RIAs and broker-dealers.

Finsum: The recruitment environment for financial advisors has changed in 2023, but there is no change in the pace of growth for RIAs and broker-dealers.