“A combination of things is driving the disruption in the industry. Whenever there is pressure on the industry, whether real or perceived, it creates movement,” says Gregg Johnson, executive vice president of branch office development and acquisition for Securities America, one of the Ladenburg Thalmann companies.
“The market is competitive right now, but we have been in a strong position with record growth for four straight years. Technology is always on the short list for advisors when they are thinking of making a change—it is critical—and we have always invested heavily in technology,” Johnson says.
Advisors always have to decide “if the pain of staying where they are is greater than the pain of moving. The trend of advisors leaving the employee channel to be independent will continue,” which is good for broker-dealers who want to grow, Johnson adds.
Broker-dealers offer simplicity of moving as an enticement, says Andrew Daniels, managing principal of business development at Commonwealth Financial Network, based in Waltham, Mass., and San Diego. “There is an unfounded concern among some wirehouse advisors that it is a Herculean task to go independent. That fear of the unknown causes inertia. After they move, most of the advisors we recruit say they wish they had moved sooner,” Daniels says.
For advisors who are already on their own, the size of some broker-dealers can be a put-off, Daniels says. LPL Financial, the largest independent B-D, lost more than a few advisors when it took over National Planning Holdings’ four broker-dealers, and the fallout from that deal is still ongoing.
“Bigger is not always better,” says Daniels. “Most advisors who come to us are looking for the same things they want to give their clients—a long history of slow and steady growth.”
One of the things Commonwealth offers advisors is a glide path to the fee-only space to keep pace with the trend toward transparent fiduciary services, he adds. Commonwealth is apparently doing something right as it has been named the highest in independent advisor satisfaction by J.D. Power five years in a row. It also is part of the trend of many IBDs that have been changing executive leadership in recent months.
It was announced in June that Commonwealth’s chief financial officer, Trap Kloman, will become president and chief operating officer at the end of the year. Other firms have announced similar moves, all of which keep the industry in the news and top-of-mind for advisors.
Raymond James Financial Services is promoting Jodi Perry to president of the Independent Contractor Division, a newly created position, after appointing her national director only a few months ago. She is now the highest-ranking executive overseeing independent advisors at Raymond James. The move is part of a succession plan that moved her boss, Scott Curtis, up the corporate ladder to president of the Private Client Group.
Securities America lured Jim Meyers from Ameriprise to be its chief operating officer, and Atria Wealth Solutions, the parent company of three IBDs, including recently acquired Cadaret, Grant & Co., snatched Matthew Bassuk from Cetera Financial Group to run its national recruiting efforts.