November 28, 2023

As financial advisor recruiters and consultants, we realized something: Our team is constantly immersed in data on the things that are top-of-mind for advisors—whether or not they are considering change.
The questions that are most frequently asked:
Why are advisors moving?
Where are they going?
What do transition deals look like?
Which firms are winning the recruiting race, and which are losing?
Will this velocity of movement continue?
What’s interesting is that none of this information exists in one resource—it is gleaned from a variety of sources, as well as from our own experiences.
So we took it upon ourselves to fill the gap. That is, to provide a single source compendium of key data on advisor movement. To that end, Diamond Consultants created the Advisor Transition Report, An Update on Advisor Movement in the Wealth Management Industry, covering the first half of 2022.
While accurate advisor movement data is notoriously difficult to obtain, by design, the report serves as a framework for advisors who are curious about what’s changing in the wealth management industry and the potential impact on their businesses.
The good news is that even amidst a turbulent economy and market, advisor movement in the first half of 2022 was extraordinary! Consider these 8 key takeaways:
1. 4,249 experienced advisors (those with a Length of Service >3yrs) changed firms in the first six months of 2022. That’s an average of 708 advisors on the move per month!
2. The wirehouses have been among the most significant net losers of advisor headcount—down over 300 advisors.
3. Within the wirehouse world, the first 6 months of this year exposed massive deltas between the winners and the losers—Morgan Stanley MS added a net 87 advisors while the rest were all down on a net basis.
4. Independent firms saw the most success in recruiting—adding 287 advisors on a net basis.
5. Transition deals were at record levels—on average 250-350% of T12 for W-2 advisors and 30-100% of T12 for independent advisors. These numbers have shown no signs of cooling down. And, for the most coveted advisors, several firms have demonstrated a willingness to craft creative (and eye-popping) deal structures.
6. Advisors moved to and from firms with and without Protocol protection—and the lack of Protocol protection appeared not to deter movement based on the data. For example, any advisor who joined Morgan Stanley, a winner in 2022 H1 recruiting, did so without the protection of Protocol.
7. The fact that regional firms also added nearly 200 advisors on a net basis is further proof that advisors want more than the best recruitment deal: They’re after better culture and greater control, too.
8. Some advisors moved between channels without changing firms. For example, many advisors slid into the independent FiNet channel of Wells Fargo WFC from another division of the firm. This represents an interesting trend in the industry: Many firms, including LPL, Stifel Nicolaus, and Raymond James, have expanded the ways in which advisors are permitted to affiliate.
No doubt, a seller’s market fueled by increased competition among models has put quality advisors in the driver’s seat when it comes to recruitment packages.
But it’s much more than the high watermark deals motivating advisors to consider change. The biggest driver of this momentum is the desire to serve clients better, receive greater value from their firm (more commensurate with the revenue the firm keeps), and grow without limitation.
Plus, advisors are thinking bigger picture and longer-term—with a more acute focus on building enterprise value.
So if their current firm isn’t proving to be the best partner to achieve all of these goals, an expanded waterfall of possibilities provides advisors with more legitimate options than ever before that will check off every one of those boxes and then some.
Surely, market volatility may impact those advisors who tend to be less inclined to consider change in a choppy market. Outside of market conditions, a “supply shock” – such as a traditional firm offering new retention incentives or a sweetened retire-in-place program – might hinder recruiting efforts. But so far, all indicators suggest the momentum will continue.
Ultimately, the first half of 2022 has proven that advisors are the real winners as firms have stepped up their games to become attractive landing spots with strong recruitment deals to match. But the most powerful driver of movement comes from the advisors themselves—those who are looking for greater freedom and control in how they serve clients and grow their businesses. With the ever-increasing options in the industry landscape, it’s hard to imagine the momentum slowing down anytime soon.
The Advisor Transition Report is available for download on the Diamond Consultants website.


About Author

Leave a Reply