An expanding number of firms are highly interested in winning over advisors, making competition for these professionals more intense. The following are the categories of competitors looking to attract and keep advisors.
Many advisory firms are looking to grow by bringing in high-quality advisors. By recruiting advisors, these firms grow assets and other business and can anticipate future success. Sometimes, these are mergers between advisor firms. Other times, it is just advisors joining from another firm.
Platforms encompass a wide array of different firms, such as:
• Broker/dealers
• Corporate RIAs
• Custodians
In some situations, elite advisors are using multiple platforms.
A relatively new, major player in the competition for advisors is the aggregators. By combining the success of advisors and sometimes other professionals such as business managers or accounting firms, aggregators intend to create scale and, subsequently, a very profitable sale. More and more aggregators have extensive private equity backing.
There are various ways the competitors use different incentives to win over advisors. The claim of back-office support and superior technology is common. Some platforms highlight advisor-friendly compliance.
Financial incentives can be very effective in attracting and keeping advisors. Starting with better payouts, there are forgivable loans, and equity on the platform. Some platforms, especially aggregators, provide funds for advisory firms to acquire other advisors.
What is essential for the long-term success of the competitors is organic growth. While some platforms are less concerned with organic growth, it is critical to many advisory firms and aggregators. Organic growth is also extremely important to most advisors.
According to Brett Van Bortel, director of consulting services with Invesco Global Consulting and co-author of Street-Smart Networking: How Financial and Legal Professionals Can Cultivate Centers of Influence for a Flood of New Affluent Clients, “Helping advisors become more successful is a powerful way to win their allegiance. For example, showing them how they can not only source new wealthy clients but better serve them consistently results in advisors wanting to work with you, whether you’re a money management firm, a broker/dealer, or an aggregator. For most advisors, the most attractive form of business development support is showing them how to move further upmarket, working with wealthier and more successful clients.”
High-quality education on connecting with more and better clients is beneficial, but some firms are going further and making strategic connections for advisors. According to Andree Mohr, chief implementation officer for Integrated Partners, a leading financial advisory firm where she oversees the growth initiatives, including the CPA Alliance program, “Not only do we make an extensive effort to empower our advisors, but we also connect them with accounting firms that can provide them clients for wealth management services.”
What will happen is that, at every level, these competitors will raise the bar. For example, they are going to continue investing in their back-office operations. They will make a concerted effort to provide meaningful financial incentives. And they will put more resources into helping advisors grow their practices.
Russ Alan Prince is the executive director of Private Wealth and a strategist for family offices and the ultra-wealthy. He has co-authored 70 books in the field, including Making Smart Decisions: How Ultra-Wealthy Families Get Superior Wealth Planning Results.
