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What Do Advisors Who Change Firms Have in Common?

Nearly 34,000 financial advisors switched firms in 2014, and a new analysis offers insight into what those individuals have in common.

Fidelity’s research reveals that, compared to its previous study in 2013, those who are “Movers” today are more likely to be female (14% vs. 8%), have clients with higher assets ($829,000 vs. $673,000), and tend to be younger (22% are Gen Y vs. 14% in 2013).

As it turns out, almost one-third of these “Movers” made their first moves within the first four years of their careers. Fidelity research found that there are more Gen Y advisors among the highest-producing Movers (43% of advisors with $250M+ AUM versus only 14% in 2013), indicating that more business is at risk today with these young and early movers.

Lessons Learned

Moving to independent channels continued to be the largest trend – half of Movers chose an RIA or IBD. Those who chose an RIA or IBD cited several reasons for their decision, including:


  • having more control over daily operations;

  • the ability to focus on clients; and

  • more independence in developing and executing investing strategies.


However, based on comparisons to previous studies, financial motivations – while still one of the top reasons to move – may be less important now than they were in the past: Movers more frequently cited having more control over their practice (15% vs. 8% in 2013) and having a better work/life balance (30% vs. 21%) as among the top reasons for leaving their previous firms.

Good Moves?

The research suggests that most Movers are seeing benefits from their decisions. Nearly all (92%) are happy with their decision to move; the vast majority (80%) say they are in a better financial position after the move; and they reported a big jump in satisfaction (just 8% were satisfied before the move vs. 67% afterwards). From a financial standpoint, Movers who have been with their firms for three to five years saw, on average, a 59% increase in their assets under management (before moving, the average AUM was $105M; after moving, the average AUM was $167M).

Not that moving was a panacea for all job ills; frustrations included the amount of paperwork involved (25% vs. 39% in 2013), the length of the transition (24% vs. 29%), technology issues (20% vs. 28%), and the difficulty in transferring investments (16% vs. 21%).

Former colleagues who had already moved were involved in more of the move decisions (40% vs. 29% in 2013.

What to Do?

Fidelity offered the following key considerations for firm leaders interested in staving off these moves:


  • Provide greater autonomy around and improving investment capabilities. The report says that movers are looking for the freedom to choose investing strategies that are most appropriate for their clients and they want access to research and analysis on investments. Consider how to improve existing systems and potentially implement new ones.

  • Provide more explicit information on compensation. Fidelity notes that providing training and communication on how compensation works at the firm, initially and throughout the careers of younger advisors. Additionally, create a career path with transparent guidelines on the results needed to transition from one role to another. For more experienced advisors who are critical to the firm, consider offering equity and ownership opportunities.

  • Promote job satisfaction, particularly for top performers. The report's authors note that Movers are looking for more support from their firms, and thus offering them access to client referral programs and providing firm marketing and business development support to help them build their books of business and differentiate themselves in the marketplace can be useful.

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