Advisor recruiting slips at Stifel, surges at Raymond James

With large brokerage and wealth management businesses this month reporting varied results in hiring and attracting financial advisors, the outlook for recruiting advisors remains both difficult and costly.

Firms that want to hire advisors or move them onto their platforms as independent contractors have to tickle their imaginations, convincing them they can use technology like artificial intelligence to spur growth, and appeal to their wallets, industry recruiters said.

“Recruiting is more intense than ever, and that’s because there’s really only  four ways for firms to grow,” said Danny Sarch, a veteran recruiter. “That’s from same stores sale, acquisitions, training, which is a crapshoot, and recruiting.”

“The pool of financial advisors is shrinking but demand for firms to grow is omnipresent," Sarch said. “The same group of firms is going after a smaller pool of advisors, and that makes for a challenge.”  

Some firms are charging ahead when facing the recruiting challenges of the moment while others appear to be falling off the pace.

Take Raymond James Financial Inc. and Stifel Financial Corp., both of which reported quarterly earnings this week.

Stifel reported 2,357 financial advisors at the end, compared to 2,374 at the same time last year, a decline of a little less than 1%.

The firm recruited 28 financial advisors during the quarter, including 13 experienced employee advisors, with total trailing 12 month production, or total fees and commissions, of $10.5 million.

During the same period a year earlier, the company recruited more than twice as much revenue. Stifel recruited 36 financial advisors during the quarter, including 24 experienced employee advisors with total trailing 12 month production of $24 million.

“We've been dealing for a while with sort of the balancing [of] recruiting with generally retirements,” said Stifel’s CEO, Ron Kruszewski, during a call Wednesday with analysts to discuss results. “What you see is increased productivity per advisor because we retain clients and we're adding more productive advisors. I'm probably as optimistic about the recruiting landscape as I've been.”

Meanwhile, Raymond James had its best quarter for recruiting quarter ever, said Paul Reilly, CEO, during a conference call with analysts, also on Thursday. The company for the three months ending September recruited across all platforms total client assets during the quarter of $22.3 billion, surpassing the previous best quarter which occurred in 2021 in terms of recruited assets.

“The biggest change probably over the last few years is [recruiting] fewer advisors in total but much, much bigger books,” Reilly said, referring to a financial advisors “book of business” or client and revenue base. “So not only was this year an onboarding of probably the largest books we ever have but also the same in the pipeline. We've become a destination for very large teams.”

“Bigger firms are having a better year in recruiting,” said Jodie Papike, CEO and managing partner at Cross-Search, a recruiting firm. “Struggling firms are having difficulty competing with those that are currently having the most success.”

“It’s a slow quarter with lead flow, and advisors are not saying yes to meetings right now,” said Casey Knight, executive vice president of ESP Financial Search. “The market right now is plagued with old pitches and ideas that don’t intrigue advisors. In the past, all a firm needed was the biggest check to win.”

“That’s not enough to inspire advisors to take a look,” he added. “Advisors want world class resources that help save more time, serve clients and keep up with AI.”