‘Where have you been all day?’ Why advisors may be taking unusually long lunches
Wealth management executives may be taking a lot of long lunches over the next few months.
Industry professionals say they’re more interested than ever in switching jobs this year, according to executive search firm Kathy Freeman Company.
Interest in moving to a new firm jumped 20 percentage points, to 63% this year from 43% in 2018, according to executives who responded to the firm’s 10th annual Talent Trends Report.
Last year, 13% of survey respondents made a move. In 2017, only 10% switched firms. But Kathy Freeman, president of her eponymous firm, expects the percentage to be considerably higher this year.
Larger paychecks, stock market volatility and the industry’s M&A boom are impelling financial services executives to consider a change of scenery, Freeman says.
Recent RIA benchmark studies by Charles Schwab and Fidelity show steadily rising compensation levels, and over half the professionals responding to Freeman’s survey said they got a raise last year. Of those, 54% said their compensation rose between 11% and 25%.
Consequently, advisory firms are offering more generous non-cash perks and innovative incentives to attract and retain professionals in the tight labor market.
“I think there’s a direct correlation to the frothy compensation levels we’re seeing and the increased appeal of considering a move,” Freeman says. “If you’re seeing there’s high demand for your skills, you’re interested to find out what your value is. It’s a little bit like listing your house at the peak of the real estate market.”
Seller's market for talent: Almost 80% of survey respondents said their firm couldn’t fill at least some job openings.
The inevitable end of a decade-long surge in stock prices, underscored by more frequent market dips has also fueled interest in taking job interviews, Freeman says.
“Executives are anticipating the end of the bull market,” according to Freeman. “That’s making them think about the sustainability of their own firm, and their own position, when times get tougher. This is a good opportunity for growing firms to land some key talent.”
The red-hot RIA M&A market is another factor contributing to advisor wanderlust, Freeman says.
“If your company is sold, you may lose your seat at the table,” she points out. “But even if you’re retained, you’re going to have to deal with change. So if you’re going to be in a changed situation anyway, you’re more open to making a change on our own and looking at other firms.”
Job seekers can expect to find a seller’s market.
Almost 80% of survey respondents said their firm couldn’t fill at least some job openings.
Nor is the end in sight, Freeman says.
“There’s just not enough talent,” she explains. “The industry hasn’t done a good job of backfilling positions and letting young people know advisory firms are a desirable place to work.”
But the talent shortage has a silver lining for next-gen professionals, Freeman believes.
“Even though they may not be prepared to go to the next level in their firms,’ she says, “they will be brought along and developed, giving them a chance they may not have had otherwise.”