COVER STORY
The High Cost Of Luring Business
c With up-front money for job-hopping advisors hitting highs , advisory firms are finding new ways to compete .
BY JENNIFER LEA REED
IN
A RECRUITING ENVIRONMENT WHERE advisory firms in all channels have been consistently offering piles of money to lure talent into changing jobs ( and hauling their assets with them ) an inevitable — though maybe unintended — result is starting to emerge .
Money alone is often no longer as compelling as it once was . “ Consolidation is all around us , and there ' s a lot of people that are out there seeking new homes , new firms to partner with ,” says Tammy Robbins , executive vice president and chief business development officer at Cambridge Investment Research . “ But it ’ s not just about the up-front money . It ’ s also about the long term .”
And that means , she says , potential recruits are asking firms : How will they be able to grow ? How will they be supported with compliance , back office , virtual office , technology and marketing ? What bells and whistles are available to ultrahigh-net-worth clients ? And above all , what equity opportunities are there ?
“ These people have had relationships , and deep relation- ships , with their prior firm , sometimes for decades . And when they go through a transition , things change and a lot of times they lose those relationships ,” she says . “ So if they go out and look for a new firm to partner with , they really want to make sure that where they go next is going to be the last place that they go .”
That ’ s not to say up-front money isn ’ t important . But rather than simply have recruitment wars based on price , firms are finding ways to differentiate in other ways that might take the emphasis off the cash .
Much has been made of late about how advisors get to choose their own adventure in the industry — they can go to a wirehouse , an independent broker-dealer , a hybrid RIA or a pure RIA . They can be a broker , an investment advisor , or both . They can keep their firm or affiliated firm at arm ’ s reach , or locked in a full embrace . Certainly , the full embrace pays more in the short term . Jodie Papike , CEO and managing partner at Cross-Search , an Encinitas , Calif . -based recruitment firm in the independent broker-dealer space , says that up-front money has
IMAGERY VIA GETTY IMAGES OCTOBER 2024 | FINANCIAL ADVISOR MAGAZINE | 37