A new report from Aite Group sheds light on broker movements across the wealth management industry. The report addresses whether the breakaway trend will continue, measures captive brokers desire to leave their employer (including motivations and preferred destinations), and examines the effect retention incentives have had on brokers appetites for breaking away. The report also looks into the motivations and perceived obstacles for breakaways interested in going independent.
Retail brokers interest in switching firms provides wealth management firms with both a threat and an opportunity. As dominant wealth-management players fine-tune their business models for post-crisis times, they are giving much attention to the retention and attraction of top financial advisors. With close to 20% of brokers more likely than not planning to leave their employer within the next 18 to 24 months, much opportunity exists for firms across the wealth management industry to onboard advisory talent they might not have had access to before the crisis.
While retention packages have greatly reduced brokers desire to break away, wirehouses are not yet completely free from worry, says Alois Pirker, research director with Aite Group and author of this report. Top performers that remain dissatisfied could easily choose to defect, especially as rivals continue to offer unprecedented sign-on bonuses for top talent. Across lower-tier producers (brokers that havent been locked in), wirehouses should prepare to see a continuation of intense breakaway activity.
D.C.