WASHINGTON -- Wealth management firms seeking to grow by recruiting new advisors need to first develop a clear business strategy.

That was the message industry consultant John Furey, principal of Advisor Growth Strategies, pounded home to advisors at Schwab Advisor Services' annual Impact conference on Monday.

The set of advisors looking to change firms “has moved beyond breakaway advisors,” Furey told a packed session. “Advisors are transitioning for strategic reasons beyond just a channel change.” Those reasons include succession, control, economics and a better platform and experience for their clients, he explained.

As a result, firms have to match their business strategy to their recruiting strategy, Furey said.

Firms looking for so-called inorganic growth -- that is, acquisition of new books of business -- need to identify their ideal candidate and recruit systematically rather than randomly or passively, Furey advised.


Successful firms must know why they want to add advisors and build around a defined strategy -- whether for succession and legacy, creating business value and scale, building new capabilities, or handing off management of functions the founder is no longer interested in.

Doing competitive intelligence and being able to speak the same language as potential recruits or partners is critical, Furey emphasized.

Glenn Kautt, vice chairman of Savant Capital Management (and Financial Planning columnist), told the audience he found this out the hard way. While heading his own firm before merging with Savant, Kautt interviewed a number of principals from smaller firms as he was looking for a succession plan. None of the courtships were fruitful.

“I realized most small advisors were not willing to risk their careers to take a jump up,” he said.


The importance of cultural fit when bringing on recruits was also emphasized by Furey and the three wealth management executives on the panel.

“Just as the three most important words in real estate are location, location, location,” the three most important words in recruiting are "culture, culture, culture,” Kautt said.

Wirehouse brokers usually present the biggest cultural challenge, according to Jim Casey, president and CEO of Integrated Wealth Management.

“You want to make sure wirehouse brokers are not just running away from something,” Casey said. “People who come over for money just won’t work out.”

Mariner Wealth Advisors once acquired a transaction-oriented firm simply because the price was right, said Mariner’s president, Gary Henson. Bad idea: “It was the worst move we ever made,” he said.

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