Displaying items by tag: recruiting

In 2023, registered investment advisors (RIAs) experienced a notable rebound, with assets under management rising nearly 18% to a median of $542 million, according to Schwab’s RIA Benchmarking Study. 

The median organic growth rate hit 5%, excluding market performance. RIA revenue increased by 6.3%, and the number of clients grew by 4.3%. Top-performing firms saw even higher growth rates of 12%. 

Key strategies for success included having a documented client persona, a solid value proposition, and a structured marketing plan. Client retention has remained steady at 97% over the past decade. Additionally, growing firms are focusing on talent acquisition and developing staff skills to drive future growth.

Finsum: Firms will simultaneously be doubling down efforts on retention and recruiting in 2024.

According to a Ficomm Partners survey, today's retirees are the last generation to rely heavily on referrals for choosing financial advisors. Over the next five to ten years, digital marketing will become increasingly crucial for attracting clients.

While 60% of those over 60 prefer referrals, only 17% of those under 44 feel the same. Instead, 57% of younger investors hired advisors based on digital marketing, compared to 20% of older respondents. 

This shift indicates that advisors must adopt a multi-tactic digital marketing strategy to stay competitive, as younger clients prefer researching and making purchases digitally. Additionally, the survey found that no single digital channel was superior; a mix of channels was necessary for effective marketing.

Finsum: Social media literacy is a must to staying in touch with this new generation of investors. 

Advisors often hesitate to switch firms due to fears of client attrition and contractual issues, even when better opportunities exist. Clients, however, are generally supportive of changes when benefits are clearly communicated. 

The transition process is still cumbersome, involving new paperwork and logins, despite technological advances. Effective communication about the long-term advantages of the move can mitigate client concerns. 

Partnering with a firm experienced in advisor transitions can help streamline the process. Understanding and managing perceptions can lead to a smoother transition and higher client retention.

Finsum: The right affiliate can make this transition much smoother so consider this when making the jump. 

Citizens Financial Group is recruiting wealth advisors from larger firms, prioritizing advisors' character and commitment to client service over their previous affiliations. Thomas Metzger, the firm's senior vice president of private wealth management, has led this effort, bringing in significant teams from JPMorgan. 

These recruits include a 12-person team from San Francisco with over $5 billion in assets and a four-person team from Boston with about $1 billion in assets, both previously from First Republic Bank. The collapse of First Republic and Silicon Valley Bank in early 2023 created opportunities for Citizens to expand its wealth management operations rapidly. 

Citizens has opened new private wealth offices in major locations and aims to offer comprehensive, integrated services under one roof to minimize frustration points advisors face at larger firms. The bank plans to continue its growth by adding more advisor teams throughout the year.

Finsum: Firms are capitalizing on last years financial turmoil and its might be time to take advantage as well. 

Non-compete agreements are rare among wirehouse advisors but more common in the employee RIA space. However, non-solicitation pacts are more prevalent and are different in nature, allowing advisors to move to competitors but restricting direct client solicitation. The FTC's recent rule banning most non-compete agreements has stirred discussions in the financial services industry, particularly regarding its potential impact on advisor movement.

Despite concerns, many advisors already operate without non-competes, and the rule's long-term impact remains uncertain due to expected legal challenges. The financial advisory industry is currently experiencing high levels of recruiting and acquisition activity, driven by advisors seeking better fits for their practices and firms enhancing services to retain talent. 

Non-solicitation agreements allow advisors to announce their moves indirectly, hoping clients will follow, but moving firms still entails significant effort. 

Finsum: These legislative changes are something to keep in mind in recruiting and changing firms, but also when it comes to selecting a new firm.