2014 Outlook Prompts Advisor Movement

Posted on March 11th, 2014 at 3:00 PM

From the Desk of Jim Eccleston at Eccleston Law Offices:

The Elzweig Report reveals the following helpful information for advisors who are considering a transition.

Recruiting Outlook for 2014

According to industry recruiter Mark Elzweig, recruiting among financial advisors is off to a fast start in 2014. But he also states that uncertainties in 2014 test advisors’ confidence to move. On balance, stellar productions and optimistic clients still will be the factors encouraging advisors to move forward.

Trend of Advisor’s Movement

According to Cerulli Associate reports, more than one third of financial advisors are planning to leave the business in the next 10 years. However, firms can’t replace advisors as fast as they leave. On the one hand, trainees take a long time to bring up to speed, on the other hand, experienced advisors always have large recruiting package guarantees.

Retention Packages Aging

Retention packages offered by wirehouses increase and contracts last longer. As these obligations continue to age, so does the financial penalty for jumping to a new broker-dealer. For wirehouse advisors, taking a recruiting deal from a competitor makes more financial sense with each passing year.

‘Smaller’ Producers More Valued at Regional and Independent Broker-Dealers

Advisors grossing less than $500,000 are leaving wirehouses and moving to regionals and independents, which value their production, – and offer deals, higher payouts and greater access to home office staff. In the independent channel, advisors with smallerbooks increasingly are joining more well-capitalized broker-dealers with broader and deeper resources.

Fee-Only is Winning Over Traditional Advisors. 

As advisors do more fee-based business, many are shedding broker-dealers entirely and are starting their own RIAs or joining existing ones. Independent RIAs enjoy a 100% payout and pay lower ticket charges, though operational costs often can be underestimated.

Succession Planning

Many advisors in their 50s and older are moving as part of their succession planning. They are joining new firms that pay them signing bonuses and then preparing to hand off their books to younger advisors at the conclusion of their deals. This way they can capture two bonuses: one for joining the firm and one for the gross done from their book after they retire.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


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Thank You from the bottom of our hearts for all you have done for us. When we realized this was a very bad investment - we did not know where to turn for help. Then we received your name. When we called you - you were so kind to us and then agreed to help us. For this we are so very grateful. The world would be a much nicer place if there were more people like the two of you in it. We will always remember all the help and kindness you have shown us. Thank you so very very much for everything.

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