Advisors who switch firms are overwhelmingly happy about it

Most advisors who switch firms say they’re glad they made a move, according to results of a survey published today.

That was the case among 83 percent of advisors who went to new companies within the past three years, Advisor360 found. That group commissioned a survey in October of 300 advisors, including 155 at enterprise wealth management firms who changed employers.

Over a third, 35 percent, not only said they were happy with the decision to change but that they wish they had done so sooner.

The leading reasons why they jump ship for other opportunities are the promises of better tech and higher compensation, the survey found. Among the respondents, 100 percent of those who were happy about switching firms said they were also pleased with the tech stacks – and the same was true for dissatisfaction about the move and the new company’s tech, said Darren Tedesco, President at Advisor360.

“It’s a direct correlation between advisor satisfaction and the tech satisfaction,” he said.

Advisors want tech that helps them bring on new clients and become more efficient, which also helps with work-life balance, he said.

Nearly 80 percent of advisors who made a switch said that tech was a contributor in their decisions, according to the report. The second most cited reason was compensation, though the company did not specify what percentage of advisors said so.

The results jibe with the findings of a survey earlier this year by JD Power of more than 4,000 advisors. That report found that 34 percent of employee advisors and 41 percent of independents who are at least two years from retirement are planning to change firms within a year or two. Compensation and tech were also reasons advisors in that survey said they were making leaps.

Even so, decisions to change companies can’t be distilled into simple categories, said Jodie Papike, CEO of Cross-Search.

“Compensation and technology are always big factors. But I wouldn’t say that they’re the main reason why people make a move,” Papike said. “There has to be enough of a pain point – or pain points – for someone to go through the effort and inconvenience of making a transition.”

That pain often comes from bad support, and it’s common for advisors who spend excessive time on administration to look elsewhere, she said.

“I’ve really been seeing an uptick in advisors being unhappy about the service they’re receiving at their current firm. That along can literally drive someone to make a move,” she said.

One advisor who called her recently pointed to significant lag times in getting his marketing materials approved – something that used to take only a few hours but now takes a week or so, she said.

And there’s another issue that gets advisors thinking about changing companies: mergers and acquisitions. If the company they’re at is purchased by another RIA or broker-dealer, it’s common to pause and think about whether the acquiring company’s culture is a good fit, Papike said. And with so much interest in the RIA business, fueled by private-equity money that has pushed valuations high, “the consolidation is only going to continue,” she said.

As that goes on, firms may want to consider the tech they offer to advisors, as that can either help or hinder business.

The top tech headaches advisors who move said they have with their prior firms are: a lack of client-facing options, such as apps or self-service portals; poor quality data; and not having tech tools well integrated, Tedesco said.

“Clients are looking to do more of the work themselves that advisors typically have done,” he said.

After advisors change companies, the tech features that are linked most strongly to their productivity gains are: simplified and accurate reporting; client apps or portals; and automation made possible by AI, he said.