Today, experienced financial advisers, as well as those looking to join the profession out of college or as a second career, have an unprecedented number of affiliation options. One of the most consequential decisions they need to make is the size of the firm they want to call home. In a consolidating industry, where firms are constantly getting bigger (and more impersonal), many advisers are looking for the more intimate experience of smaller firms.
No one likes to be ignored, and at the largest wealth management firm, that’s exactly what happens. If an adviser isn’t among the top 5% to 10% of producers within a mega-firm, it’s difficult for them to get the support needed to expand their businesses or even get the home office’s attention to address problems they may be having.
Advisers are rightfully proud of the businesses they create and believe they deserve an elevated level of service and support, even if they’re not on a big firm’s “top producer” list. Not getting an invite to the incentive trip is one thing but knowing there’s an “elite service desk” they don’t get the phone number to, is too much for many to tolerate.
Advisers' preference for smaller firms reflects the unique needs these firms fill in a dynamic marketplace. Smaller broker-dealers and independent RIAs provide a platform not only for more strategic growth, but for the adviser to thrive within a more attentive and supportive environment. It allows advisers to be seen and heard, a fundamental human desire. No one wants to be reduced to just a rep code.
Historically, larger firms had a corner on the bells and whistles of a modernizing industry. That’s no longer the case. In addition to providing more attentive service than the larger firms, smaller firms have narrowed the support gap. Thanks to innovative off-the-shelf solutions, smaller firms can now deliver sophisticated technology and access to financial products, giving advisers more of what they want without sacrificing what they need to run their businesses.
BridgeMark Strategies, a transition and M&A consultant firm, said 82% of the advisers it worked with in 2021 chose to affiliate with smaller firms or smaller groups within larger firms.
Choosing the best option depends on the type of business the advisers run and how they like to engage with the non-client-facing aspects of our industry. If an adviser wants to work with a business development team and have a hand in regulatory strategy, affiliating with a smaller broker-dealer or RIA may be the right choice. But if the adviser is only looking for a more personalized support system, then joining an existing office of supervisory jurisdiction might be a better fit.
Regardless of affiliation, joining a smaller group, with enough scale to add stability, will help advisers gain the attention and support they deserve, along with the camaraderie, shared values and common culture they crave.
Michael Nessim is CEO and managing partner of Kingswood U.S., an SEC-registered RIA and Finra-licensed broker-dealer with more than $3 billion in assets under management.
Sam Su worked at UBS Financial Services in San Francisco from 2008 to 2023 before jumping to Morgan Stanley.
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