Displaying items by tag: independence

Financial firms have tried desperately to increase recruiting efforts in the last year or two. While companies like Wells Fargo concentrated on incentive-based tools around retention and recruiting Ameriprise Financial has taken a technology approach. In partnership with Seismic, they have ramped up the suite of technological offerings in order to track, grow, and run their business. The biggest tools offered are LiveDocs, LiveSend, and Interactive Content which all augment their services in order to allow them to compete with larger companies They see their automation efforts as a superior offering to purely financial incentives and it resulted in over 2% growth in the last year.

Finsum: A new approach to advisor recruiting by Ameriprise could definitely give their advisors an edge over competitors and lead to more long-term growth in recruits.

Edward Jones and LPL are two industry titans in terms of total advisor employment, but these firms are moving in drastically different directions when it comes to talent acquisition and development. Once Jones had a 30,000 advisor target but since the pandemic, they have scaled back recruitment efforts and shifted strategy. This had their numbers dwindle by 2% year over year to 18,823 brokers. LPL on the other hand has doubled down on recruiting efforts and saw its head count surge by 15%. What drove this growth was a combination of new recruiting models and full-service firms and acquisitions. However, despite losing advisors Jones saw revenue grow by 22% from 2020 to 2021, because the rising markets increased the fee-based revenue.

Finsum: There are lots of transitional costs from squirting new talent: training, legal, etc in the short run this can eat at the bottom line when trying to grow.

CEO Ron Kruszewski made waves when he announced the $1 trillion goal for client AUM for the wealth division at Stifel. Growing existing clients and recruiting are going to be two main goals as to how Kruszewski outlined how they plan to get there. Currently, the 2,300 brokers at Stifel manage less than half of their trillion-dollar target. Recruiting has been a critical part of their current growth growing by almost a quarter in the previous year, but competitors like Raymond James had almost four times the broker headcount when it crossed the $1 trillion AUM mark.

FINSUM: Recruiting shapes how a company drives revenue as higher-end recruits, making many stories, have wealthier clientele.

Wells Fargo has been one of the dominant figures trying to improve advisor headcount and it looks as though some of those efforts are paying off. Steven Tahn is moving from JPMorgan, where he has been since 2012, and bringing $2 million in GCD as well. Wells has had a series of declines for the last couple of years and has fallen short of targets when it comes to recruiting and retention. However, signs of improvement are there and their series of penalties and bonuses for client retention could be starting to pay off.

FINSUM: We’ll be keeping our eyes on the biggest changes in recruiting and retention in 2022 among financial advisory firms.

Wells Fargo sent out a thank you note to external recruiters for their work and efforts in locking in lots of senior hires in 2021. Well’s is going to continue and extend many of the measures it implemented in 2021 into 2022 such as hiring offers for brokers and higher referral fees for outside recruiters. Wells saw their recruiting and retention drop after their scandal in 2016 and it’s been a continuing effort to get back to par with hires. In addition to all the sweetened deals surrounding recruiting there are also measures such as pay cuts if managers lose brokers or don’t hit sufficient hiring statistics. Well’s decision to close their international business has also been a major contributor to their inability to gain transactions in recruiting efforts.

Finsum: Wells used to stand out for their Broker compensation, however competitors are stepping up, and Wells no longer stands out.