Daniel Schwamb, vice president of business development at Kestra, says e-signatures came up at one of his meetings recently. “It’s an advisor from a large bank’s independent channel and they feel like their e-signature experience is very poor. So that’s one that’s top of mind. It’s not if you have e-signature but the breadth for which it’s deployed that’s the big thing.” He says Kestra uses e-signatures for all the transactions it can, though firms in the insurance space, for example, often won’t accept them.
Beyond tech, firms now want help in acquiring other advisories, Nagengast says. And he adds that platform flexibility is important, which is why his firm recently rolled out an RIA-IAR platform for those advisors who want to work exclusively in that vein.
“We rolled out in February what we call our investment-advisors-only platform, our RIA platform, essentially where someone does not have to have a Series 7 or Series 6 to be affiliated with us.” In June, the firm also rolled out a new transition dashboard for those advisors making the leap so that they can get transparency and speed on those assets moving to Securities America’s platform.
One firm having success with that flexible platform, says Papike, is Vanderbilt Financial Group in Woodbury, N.Y. Joe Trifiletti, Vanderbilt’s COO, says that three years ago his firm added 45 offices, that it added 24 the year after that, and this year the firm added 10 new advisors. He also says that one of the firm’s attractions is its focus on impact investing.
“Advisors who have this as a niche really gravitate towards us,” he says. “In addition to that, we have a lot of flexibility, open architecture. … In this environment, we’ve been finding that firms are getting more strict, and if you can maintain that flexibility, obviously in a compliant manner, it’s really something that’s attracting other advisors. It’s really been catching fire as far as word of mouth for us.”
Kestra’s Schwamb says the financial inducement in terms of transition assistance has definitely escalated in the last 12 months. “Where we have had a lot of traction with advisors … is helping them with the business of running their business,” he says. Many advisors stay with their current firms, even if they are unhappy, simply because of inertia—it’s a pain to change. What sends them over the edge, says Schwamb, is when something happens at their old firm that has damaged a client relationship. No. 2 is losing a prospect to another advisor who might have had more access to resources.
There’s a perception that more staff at a broker-dealer means the advisor gets better service, says Schwamb, and potential recruits often ask what the staff-to-advisor ratio is. But he says: “I’m not so sure that’s necessarily an indicator of great service. That could be an indicator of very poor internal controls and processes.” In theory, firms with better tech and internal process should be able to operate with fewer people, he says.
Higher Producers
According to Henschen, there’s also a service divide as some firms lavish quality service on higher-producing reps. “High-end reps are intolerant of poor service and some firms have a special services department for their higher producers, and that’s usually an indicator of poor service overall,” he says. “To keep their better producers from leaving, they have to add this additional layer of two-step service for their better producers. But if you look at their staff-to-rep ratio, the firms that have those special service departments, it’s usually quite poor.”
And service is a big reason people leave their firms. “I think advisors have a high level of expectation of calling the home office on the phone and having somebody answer within several rings,” says Herman. “And that they are talking to somebody qualified, competent and interested.”