Advisor BD Changes Expected to Increase in 2015

According to revised projections by InvestmentNews, advisor movement in Q4 2014 will increase by 10%, making it flat to the previous quarter. However, we could see a 15% increase in 2015. 

Overall, advisors with a total of $83 billion made a move in 2014, down from $93 billion in 2012 and 2013. While 67% of advisors on the move came from wire houses in 2014 and 2012, 60% went to another wire house last year. And a greater percentage went to regional BDs, RIAs and independents in 2012 — even as some wire houses have eschewed big bonuses.

Wire houses and insurance companies have also placed more emphasis on training and recruiting young advisors, so it’s no surprise that they represent the greatest source of advisor movement. With more wire houses not just allowing but pushing advisors to adopt fee-based arrangements and most allowing a subset of advisors to act as fiduciaries, the lure of the independent route is less appealing. 

For plan advisors, the tools they use to run their practices, like investment reporting, may be more important than the BD. This was as evidenced by the flight of many Financial Telesis advisors to NFP when FT was acquired by LPL and those advisors faced the potential shutoff of their RPAG tools. 

While wire house reps will continue to be the biggest source of advisor change, look for teams and aggregators to scoop up more advisors who are focused on DC plans.