In the past few years, the big wirehouses have spent fortunes on lucrative sign-on bonuses to attract top talent. Financial Advisors were moving to the competition in record numbers during the financial crisis (2008 & 2009). In order to stop the musical chairs, the wirehouses offered retention packages to stop the bleeding (the movement).
According to a recent report titled, Wealth Management on the Move: The moment of Truth by the Aite Group, they are predicting that many FA’s are likely to move in 2012. “Leading wealth management firms retained many of their top-producing advisors by offering retention packages, but the breakaway trend may once again pick up momentum as the value of these packages wanes.”
According to the Aite Group’s study (which surveyed 151 employee advisors), 6 % of wirehouse advisors plan to move this year, while 38 % plan to move in 2012, and 16 % plan to move in 2013.
Among the non-wirehouse advisors, 32 % are planning a move this year, while 36 % are planning a move next year, and virtually none are planning to move in 2013.
The wirehouses are still offering lucrative recruiting packages, in fact they are at an all time high. In 2012, the balance on many financial advisor’s retention packages will be reduced as they have worked off a good portion of the note by staying until now. Many financial advisors are unhappy at their firms and the pain of staying grows each day. Being prepared and having a plan B is a must.
2012 will be a big year for advisors to move firms. Advisors who stay ahead of the curve and keep their options open will be the winners. If your doors close on Friday, where will you go on Monday?