Displaying items by tag: switching firms

For years, wirehouses dominated the wealth management industry, but a growing number of advisors are breaking away to join independent RIAs. What was once seen as a risky move has now become a mainstream trend, with firms like Hightower Advisors playing a key role in accelerating the transition. 

A decade ago, wirehouse executives dismissed concerns about advisors leaving, pointing to stable headcounts, but the shift has proven undeniable. Cerulli data projects wirehouse market share will drop to 27.7% by 2027, with RIAs benefiting from the exodus. In 2024 alone, wirehouses experienced a net loss of 612 advisors, while RIAs gained 856, reflecting the increasing appeal of independence. 

With factors like autonomy, higher earnings potential, and access to cutting-edge technology driving the movement, the trend shows no signs of reversing—raising the question of how much longer wirehouses can sustain their traditional model.

Finsum: We really think technology is adapting how advisors are thinking about their evolution within a firm, wirehouses need to give them the most opportunities. 

Transitioning to a new firm requires careful planning to avoid pitfalls that can jeopardize your move. Advisors should maintain strict confidentiality and avoid discussing their plans with colleagues, as even casual remarks can tip off competitors or managers. 

It's crucial to adhere to legal and regulatory guidelines, particularly when handling client information or navigating the Protocol for Broker Recruiting. Engaging the legal team of the prospective firm and potentially hiring personal legal counsel can help mitigate risks. 

Familiarity with the account transfer process is essential, requiring detailed knowledge of the necessary forms, procedures, and tracking systems to ensure a smooth transition. By preparing thoroughly and staying discreet, advisors can reduce complications and set the stage for a successful move.

Finsum: The notice period is different for advisors than the broader job market, so be aware of these pitfalls and consult an expert. 

Technology's allure is undeniable for financial advisors weighing a move to a new broker-dealer. Sleek interfaces, integrated apps, and workflow-reducing features promise efficiency and a world-class client experience. But while ease-of-use and functionality deserve scrutiny, a truly informed decision involves understanding the security, legal, and compliance capabilities of the prospective firm's tech.

Ask how client data is secured. What are the client-facing system's encryption standards, two-factor authentication, and access controls? Understand how the platform complies with industry regulations and data privacy laws. And most importantly, what happens if the lights go out? Does a comprehensive disaster recovery plan ensure business continuity and safeguard client assets even during outages or cyberattacks?

These may seem like technical minutiae, but your clients trust you've vetted these issues thoroughly when they follow you to your new professional home. Prioritizing security and compliance in your tech evaluation isn't just about ticking boxes; it's about safeguarding your practice's foundation and fostering the trust your clients deserve.

Finsum: Cybersecurity, compliance, and data privacy are key factors to consider when evaluating a potential broker-dealer’s technology.