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'Great Resignation' Doesn't Need to Include Advisors

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What You Need to Know

  • Wealth management has seen more advisors than ever, especially in the wirehouse segment, becoming receptive to the idea of making a move.
  • The tin ear of leadership is the main culprit in advisors' desire to move elsewhere.
  • Clear communication and better services are key ways to keep top performers and their clients.

One of the most unusual features of the pandemic economy is that, even in the face of ongoing uncertainty, the number of U.S. workers rushing for the exit has shattered records — and that public reception to this trend has been mostly positive.

The wealth management space has not been immune, with more advisors than ever —especially in the wirehouse segment — becoming receptive to the idea of making a move. What’s driving this shift for advisors, though, remains somewhat misunderstood.

Most workers joining the Great Resignation did so after the rise of remote work showed them the benefits and flexibility of working from home. Many wealth management professionals, on the other hand, are moving out of concern for their clients and their businesses. They learned an important lesson during the pandemic’s earliest days, when equity markets nosedived and clients panicked.

As doom-and-gloom predictions weighed heavily on investors, these advisors were shocked to find that their firms were either unwilling or unable to help them and their clients effectively. In short, they discovered that their firms had confused access to guidance and resources (which is what they needed) with layers of management and bureaucracy (which is what they got).

During this period, the top-down approach of some large firms effectively banished their advisors to a desert island and left them to fend for themselves.

Whether it was problems with moving money during lockdowns, servicing clients from home, or back-office complications, advisors experienced multiple setbacks. The experience invited questions about why, if at all, advisors needed to give up 60 cents on the dollar to their firms if so few of their needs were being met.

These and other initial cracks in their relationships with their firms only widened in the ensuing months. In real terms, wealth management’s Great Resignation resulted from a “Great Mismatch.” The antidote is access, customized to fit the needs of advisors and their clients.

Markets plunged. Advisor access to resources and leadership evaporated.

The record is clear. At a time when access to resources and the ear of senior leadership were paramount to advisor-client relationships, many firms fell short. In worst-case scenarios, advisors were met with indecision and muddied lines of communication from C-suite executives, who often approved a policy of overcommunicating investment advice but severely under-communicated on practical day-to-day matters.

Many advisors felt invisible as nervous clients pounded on their doors and inundated their voicemail with demands that their assets be taken out of the market before it was “too late.”

Since then, a level of stability has returned to the industry, with the S&P 500, Dow, and Nasdaq reaching fresh all-time highs this November and top companies reporting strong earnings.

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But the memory of what transpired during the onset of the pandemic has been seared into the minds of the people most responsive to client needs. Many advisors still are waiting for another shoe to drop.

When the next emergency strikes, these professionals know they will need time-tested resources, including access to their firm’s senior leadership and robust support capabilities. How can firms show that they’re prepared?

Access must be more than a tagline.

Solving advisors’ toughest challenges can take an organization’s full range of resources, marshaled in a micro-targeted way to the needs of each advisor’s practice. For some, this means help with recruiting. For others, it means enhancing their back-office efficiency or marketing efforts.

The common thread is that this commitment to providing access to the right resources across an organization must be proactive. Lumping resources together as part of a “portal” or passive menu of services won’t cut it; firms need to take intentional steps to link advisors with the experts and platforms that can make a difference for that particular practice.

Firm leaders must take the time to develop an in-depth understanding of each advisor’s business, rather than simply grouping them into various buckets. Access must be led from the top, meaning that advisors are on a first-name basis with leaders who are empowered to make crucial, common-sense decisions in real time.

Most importantly, these efforts must be consistent. To connect advisors with the right experts and resources during a crisis, ensuring access must be part of an organization’s DNA in calmer times, as well.

It should be reflected, for example, in the construction of the firm’s product platform, which should provide an expansive shelf of third-party offerings while also tapping into the organization’s connections and expertise to help advisors serve clients with complex liquidity needs. These offerings should be supplemented by proactive, consultative teams that leverage their knowledge to link advisors with experts and opportunities across the organization.

As organizations move toward greater flexibility in the wake of the pandemic, advisors are revisiting relationships. They realize that if the shoe doesn’t fit, they can always find another.

If a Great Resignation is taking place in the wealth management space, it’s because advisors are realizing the solution is better access for all, an approach that democratizes investing for advisors and their clients.


Alex David is President and CEO of Stifel Independent Advisors, a subsidiary of Stifel Financial Corp.