Firms looking to recruit hesitant advisors need to start wooing their families, a new Fidelity survey suggests.

“If you have an eye on top producers, you should take the advisor and the spouse out to dinner,” Sanjiv Mirchandani, the president of Fidelity’s clearing division National Financial, said in an interview. Spouses, he adds, “are going to play an important role in the [advisor’s] decision.”

Fidelity Investments’ second annual Insights on Independence study explored the motivations and experiences of advisors who moved -- or chose not to move -- to new firms in the last five years. The study surveyed 783 advisors between November and December, with an average AUM of $150 million, and sorted them into three groups: movers, fence-sitters and entrenched advisors.


The study revealed that for 40% of the movers, family members encouraged them to make the switch; just 4% had family who discouraged it. By contrast, 23% of fence-sitters said family members had discouraged them from switching, while 69%said family members had talked things through with them but hadn't advocated for or against a move.

“The movers and the fence-sitters, they tend to be the advisors of the future,” Mirchandani said. They are “younger, more Gen X and more female, more engaged with clients and technology. They aren’t the old-fashioned stock picker. They are the type of advisor everyone should want.”

Female advisors accounted for most of the fence-sitters, the study found.

On the other side of the war for talent, firms concerned about retaining advisors should also be wooing those spouses and families regularly, Mirchandani said.


Among movers, 89% reported they were happy with their decisions to switch firms, and 77% reported they were better off financially. Movers also cited upside earning potential as the leading reason for making a move. Financial advisors who moved firms saw a 22% increase in their compensation over 2008, versus 17% for advisors who stayed at their firms, according to Fidelity. And, those who moved to an independent business model, such as a RIA or an independent broker-dealer, realized a 36% increase since 2008.

Other top motivators included confidence that clients would follow, reputation of the new firm and the prospect of achieving better work-life balance, the survey found.

Advisors migrating toward independent models also cited the ability to offer better investment solutions and client service as key criteria for selecting that channel, according to Fidelity.

Movers reported that 79% of the clients they wanted to follow them to the new firm did so, according to Mirchandani. These advisors were also able to strengthen their books of business, increasing their share of wallet with 54% of the clients who moved with them, the survey found.

“The vast majority show they are very satisfied that they moved,” according to Mirchandani. This finding indicates that advisors continue to migrate to independent channels, he said.

The reported high levels of satisfaction would appear to contradict the results of a study by consulting firm Aité Group earlier this year, which found that RIAs were more likely to report dissatisfaction with their careers than wirehouse advisors. That study covered a much smaller sampling of advisors -- 252 in all -- and included only advisors from RIAs and wirehouses, not independent broker-dealers.

“What we were really trying to do was replicate the [whole] advice industry,” Mirchandani said. “I’m sure there are some RIAs who found that being completely out on their own was not their cup of tea,” he said. But, in the independent B-D channel, “for a relatively small portion of your payout you can get all this support.”


When setting out to recruit new advisors, firms in the two independent channels should highlight these substantially higher levels of compensation and satisfaction, Mirchandani said.

“The increase in job satisfaction and life satisfaction that these advisors report is pretty remarkable,” he said.

The one downside to change, the survey found, is that most movers in the study said they had underestimated the work involved during the first 12-months after the move, according to Mirchandani.

“The number one thing that [advisors] would report having done differently, if they knew then what they know now, is being more organized and prepared” before moving, he said.

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