HOW ADVISORS FOUND EMPLOYEES IN LAST 3 YEARS

Referrals From Other Employees

Referrals From Outside Sources

Through College Placement Programs

Internet Advertising

LinkedIn

Young advisors are in high demand and have a lot of power to negotiate their contracts , perhaps by demanding that their firms take the fetters off , says Stephen Galletto , an attorney at Stark & Stark who works with advisory firms and helps them come to market .

In April , the Federal Trade Commission issued a rule banning noncompete agreements . The tamer nonsolicit agreements might remain in force , but young advisors still likely have room to negotiate terms , Galletto says , perhaps by limiting the number of months a nonsolicit applies or removing even more restrictive language . “ Something to be careful about is a non-service clause , which would prevent you from even servicing a client that sought you out ,” he says .

“ If you ’ re relying on [ restrictive covenants ] to retain talent , you ’ re going to lose the game . You have to have an incredibly attractive environment where people are thriving ... where they can collaborate , where they have all the resources they need .”

28.74 %

44.16 %

NUMBER OF EMPLOYEES

CATEGORY

— Mike LaMena , CEO , Wealthspire

55.14 %

69.16 %

72.43 %

2023 MEAN

2022 MEAN

Executives , partners and managing directors 12.06 10.57 Client relationship managers not included above 18.03 16.80 Other professionals / specialists not included above 19.65 16.07 Client services staff 15.09 12.60 Administrative staff 7.82 7.15 TOTAL EMPLOYEES 74.56 66.29

Mike LaMena , the CEO of New York-based Wealthspire Advisors , says he does see more instances where talent is moving from one RIA to another . “ If you ’ re relying on [ restrictive covenants ] to retain talent , you ’ re going to lose the game ,” LaMena says . “ You have to have an incredibly attractive environment where people are thriving for people to want to stay . If you ’ re not creating that ecosystem where they can collaborate , where they have all the resources they need … [ then ] restrictive covenants and things like that , they ’ re not going to be what keeps people at firms .”

Add Services ?

One big question firms have is whether they should add services that might have lower margins , like tax prep , even though clients , many with increasing wealth complexities , want them . For large firms aiming to be full-service — attempting to replicate multi-family offices with estate planning , cybersecurity and concierge services , there ’ s increasingly no question .

Josh Harris , the managing director of corporate development at Coldstream Wealth Management , based in Bellevue , Wash ., says things like tax services are going to be incredibly valuable to clients . “ It ’ s absolutely wrong for a wealth management firm to say that it ’ s just an add-on [ or ] it ’ s going to be a loss leader .” With clients finding it difficult to get new CPAs , “ the talent shortage with tax is really difficult ,” he adds .

The desire for more services at the same price point is going to put pressure on firms , it ’ s been said . There ’ s even been talk that firms might abandon AUM and go to different fee arrangements . Harris

ARE MANY OF YOUR EMPLOYEES STILL WORKING FROM HOME ?

72.20 %

Yes

27.80 %

No

If YES , how often are they working from home ?

On a full-time basis 4.53 % On a hybrid basis 79.29 % Only one day a week 16.18 %

34 | FINANCIAL ADVISOR MAGAZINE | JULY / AUGUST 2024 WWW . FA-MAG . COM