Over the 30-plus years I’ve been recruiting in the wealth management space, I have preached one common refrain both to managers seeking to hire and advisers looking to move: Recruiting is a contact sport.
The more hands you shake, I advised, the more knowledge you gain, the more capable you are to either attract the best talent or to find your new home. So what happens now that contact is a four-letter word and the act of shaking hands seems like a quaint custom from a time long ago?
1. Everyone is adjusting to the new normal.
Advisers tell me that they and their clients have adjusted to their own stay-at-home patterns. Everybody has their own funny Zoom stories to share about learning new technology (“Where’s the mic button?”), family interruptions (“That’s a beautiful picture, Sweetie. Wave to my friend Danny!”), and the best strategies for finding toilet paper (“Try W.B. Mason!”).
Within this adjusted framework, firms have not lost their passion for wooing and attracting top talent. Tash Elwyn, president of Raymond James & Associates, told me: “We remain committed to helping advisers from other firms to fully and safely explore their options with us and to conduct proper due diligence.”
While in the old paradigm, advisers would meet managers in bars and restaurants, the new paradigm makes it easier for advisers to explore covertly, from their own homes. “While several in-person Home Office Visits (HOVs) were delayed, we are successfully conducting virtual HOVs, with some advisers preferring their virtual meetings over the course of a single day, or spreading it out to an hour a day over the course of five days,” Elwyn explained.
2. Advisers who had already made substantial progress in their pursuit of a new employer are aggressively looking to cross the finish line and complete their moves.
I have no doubt there are many advisers who were well on the way to leaving their current firms and then paused from doing so because of COVID-19. Some of this hesitation might be because of insecurity about the state of their own practice in a bear market, being overwhelmed by the volatility of the markets day to day, or just having to deal with too many changes at home to go forward.
But more often I’ve seen within my own practice and from talking to multiple branch managers that advisers who have set dates to move are adjusting and looking to complete their transition as quickly as possible. Why? Many teams have planned moves for years after painstaking due diligence and negotiation. For them, stopping at this point would be ignoring a long-term decision in response to what they expect (perhaps hope) to be a short-term set of issues.
In addition, the current crisis has exposed and exacerbated weaknesses in
technology and staffing at their own firms. I have spoken to team leaders who described support staff who are overwhelmed by “stay at home” family obligations and are simply unable to be as effective while working from home. These leaders are now increasingly resentful of past management decisions to turn down their repeated requests for increased support.
Finally, I cannot ignore the fact that the teams that have gotten this close to completing their deals might want to capitalize on a trailing 12-months’ production that has not yet been substantively impacted by the bear market’s shrinking of their assets.
3. Transitions in certain ways will be easier.
There are many pragmatic reasons for this. First, a transitioning adviser’s former colleagues are less likely to aggressively call on strangers to solicit their business. And even if I’m wrong here, it is certainly less likely that they will land a face-to-face meeting with a stranger. Second, the vast majority of clients are now familiar with PDFs, e-signatures and, in general, doing business virtually. Finally, everybody is home, so transitioning advisers will be able to contact their clients easily. The best advisers have probably had multiple check-in calls over the last few weeks to discuss the market volatility. These teams have demonstrated their value to their clients during the most turbulent time since 2008-2009.
[More: Independence means different things to different people in wealth management]
4. More than ever, clients will demand to know why now, and why this transition is better for them.
While I do believe that pragmatically certain transitions will be easier, there is also no question that clients will want to know why an adviser is doing this now, when so much of normal life is turned upside down. Too often, transitioning advisers explain to clients why the move is better for the adviser. And while some of this also translates to why this is better for the client (such as more support), the transitioning adviser runs the risk of angering clients who do not understand why they should be inconvenienced during a very turbulent time. As always, all advisers must have the end client in mind and be able to explain why this move, at this time, is in the client’s best interest.
A final tidbit for firms still recruiting: Any adviser chasing you too aggressively is probably running away from a burning house. Caveat emptor.
Final tidbit for top advisers looking to change: Current craziness aside, stay focused on what you want to fix and how the new firm provides a solution for those specific problems. You are inconveniencing your clients. Why will this move be better for them?
[More: As wealth management firms try to hold onto assets, they don't always get what they pay for]
Danny Sarch is the founder and owner of Leitner Sarch Consultants, a wealth management recruiting firm based in White Plains, N.Y.
