“Firms need to embrace an entrepreneurial approach with their advisors,” Oros said. “Don’t treat them like they’re just punching a clock. Treat them like they’re running their own practice. Give them the flexibility to make their own investment decisions and to deliver the types of services that they want for their clients.”
Movers aren’t experiencing much buyer’s remorse. According to the study, 92 percent of respondents said they were happy with their decision to move, 80 percent are in a better financial position after their move, and movers reported a big jump in satisfaction—8 percent were satisfied before their move, versus 67 percent who said they were satisfied after their move.
From a financial standpoint, advisors who moved after being with a firm for three to five years saw a 59 percent increase in their AUM on average, from $105 million pre-move to $167 million post-move.
To keep their top-performing advisors, firms will need to pay more attention to job satisfaction and lifestyle issues within the industry, said Oros.
“[Advisors] have the ability to be very discerning about who they choose to let employ them," he said. "There are firms specializing in breakaways or aggregation who may be way ahead of the curve of the traditional industry on lifestyle issues. They can offer these movers more flexible schedules and autonomy, but they don’t have this capability exclusively. We think any firm employing advisors can embrace this.”
The decision to change firms or to go independent brought certain challenges to the study’s respondents: 25 percent said they wished they had known about the amount of paperwork involved prior to their move, 24 percent said that they wished they had known about the length of transition, 20 percent cited technology issues and 16 percent mentioned the difficulty in transferring investments.
According to the study, more advisors who seek to change firms are seeking advice from colleagues who had already moved. In 2014, 40 percent of advisors consulted a colleague, versus 29 percent in 2013.
For its study, Fidelity examined nearly 34,000 advisor transitions in 2014.