The current environment presents some never-before-heard-of opportunities for producers in the financial advice space, says recruiter Danny Sarch of Leitner Sarch Consultants, who sees a number of positive trends converging now for top-producing advisors—including members of independent firms and start-ups.
That is clearly a new development for advisors—and a commentary on the success of so-called breakaway wealth managers who parted ways with their big-bank employers to start registered investment advisors and other businesses of their own.
“Wirehouses had largely spent their time recruiting from each other,” Sarch, who is based in White Plains, N.Y., tells eFinancialCareers.
Wirehouses Recruiting RIAs
Now, “They’ve started realizing there are markets they’ve ignored, and for the first time we’re seeing wirehouses look to recruit from—and purchase the businesses of—the independent guys,” given the independents have accumulated more credibility and capital than ever before.
These days, he says, demand for top talent and clients is high, and most financial advisors are closing in on the end of their careers, and top talent now has many more options to explore. In a recent blog, Sarch commented that “If you are a successful financial advisor, of whatever type or channel, in terms of opportunities available, this is your Golden Age."
Why This is the Golden Age
Sarch points to factors such as:
1. An aging advisor population, where the average age of a $1 million-a-year producer is more than 50;
2. The increasing visibility of independent advisors. It’s not as if everyone is looking to break away, Sarch says, but “wirehouse branch managers are making their case with their large checkbooks to induce the indies who might be tired of running a business and a practice to join them,” he wrote. “These worlds are overlapping more than ever,” he says;
3. New startups. "There has never been a group of credible start-ups in this industry like we see today,” says the recruiter. HighTower Advisors, Focus Financial, Fieldpoint Private, Benjamin Edwards, Dynasty Financial and Washington Wealth Management are just some of the more prominent new names out there.
Hundreds of advisors will likely beat themselves up later on if they don’t tap into the equity/partnership opportunities that are available today, Sarch says with a chuckle, noting that “a lot of these firms are new, with private money backing them,” and they are beckoning employees with the promise of “wealth-creation events” of one kind or another down the road.
That might be the result of a new enterprise going public, Sarch says, but in other cases they’ll simply be “rolling out dramatic returns to the partners.”
“This opportunity for employees has not happened on this scale for many years,” says Sarch—not since the '70s when employees saw enterprise opportunities in being part of organizations that went public.
In any case, the recruiter says, “Getting in on the ground floor is exciting.”
Big Guns Score
Clearly, the biggest guns can score some very good employment terms at present:
Through December 7th, Investment News tracked a total of 230 teams or individual advisor moves that have taken place in 2011, with a combined $53 billion in assets. A year earlier, it logged 201 transitions involving advisors with a total of $71 billion in total client assets.
“Despite the smaller asset numbers, however, in recent weeks, a number of large teams have changed firms. In fact, four of the six largest moves of 2011, based on client assets at the time of their departure, have taken place in the last six weeks alone,” according to the report, which concludes:
“If you're a $1M producer, it appears you're able to play a pretty good hand right now and get the right deal—and perhaps most importantly, the right fit at a different firm.”