More wirehouse blues?

Once, big firms battled other big firms for the best advisory talent. Now, smaller firms are nipping at their heels as well.
MAR 28, 2011
So put yourself in the shoes of the CEO of a nationally branded wirehouse. You have 15,000 to 20,000 advisers spread across all 50 states. As a senior executive of a publicly traded corporation, your mandate is to grow your business to give a return to shareholders (which includes yourself and your entire salesforce and management staff). I'm told by senior executives that big firms will have approximately 2% attrition, regardless of market conditions. These are the advisers who are leaving the industry: Death, disability, retirement, termination for HR or compliance reasons. So, for example, with 15,000 as a starting point, you are now down 300 advisors. Count on it. No problem, you say, you can recruit that many in a year. But because you are big, and your advisors are known as among the most productive in the industry, everybody is recruiting against you. Not only are your peer big firms gunning for you, but the regionals are going after you in their strongholds. Frustrated by the cost cutting efforts that you needed to impose to survive the worst markets in generations, advisers of all sizes are deciding to go out on their own. In past years, only the advisers who could not get offers from other firms went independent. With your brand tainted and the technology and product advantage that you once enjoyed diminished, advisers of all sizes are setting up their own shops or are exploring new firms and alternative models. You realize that you can attract your share of recruits from your peer group, but your peer group is shrinking just like you are. Your war for talent used to have just one “front”: You went toe-to-toe with your direct competitors, winning some and losing some. You still are fighting those battles, but at the same time, you are beset by dozens of smaller competitors chipping away bit by bit. And very, very few of THOSE advisers, from the smaller firms, whether regional or independent, new or old, are even considering you as an option. In 2009, over 6,000 wirehouse advisers changed firms, with 4000 of them choosing to go to another wirehouse. In 2010, through August, only 2000 wirehouse advisers moved, but only half of them moved to another wirehouse. The total number of wirehouse advisers in the industry has not grown in over ten years. You have jump started your training program. You count the rookies and, indeed, all personnel who are registered when you give analysts your headcount numbers, but conveniently reduce the denominator in the equation by excluding those same rookies and registered personnel when you compute your average production. You increase your recruiting packages to increase your headcount numbers because you have no other competitive advantage to sell. What is your value proposition, today and in the future, that will attract advisers from all channels to your model, and to your firm?

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.