Which financial advisors are likely to move firms?

New research reveals the motivations and experiences behind financial advisors who change companies

Which financial advisors are likely to move firms?
Which financial advisors are most likely to move firms? New research has the answer.

According to a release by Fidelity, it is female advisors and younger advisors that are more likely to make the switch – as well as those who manage higher levels of assets.

Its investigation revealed that 34,000 financial advisors moved firms during 2014 and there was a significant uptick in several areas compared to 2013.

In particular, the research notes that movers are more likely to be female compared to previous years – they now make up 14 per cent of the total compared to just eight per cent one year earlier. Furthermore, they are usually younger – with 22 per cent being Generation Y advisors compared to a mere 14 per cent in 2013. Those who move also appear to be in control of higher levels of assets: $829,000 compared to $673,000. In addition, around a third of movers make their moves within the first four years of their career: suggesting that business is more at risk with young advisors at the start of their careers.

“Clearly, advisors are on the move; and, if they’re not moving, they’re thinking about it,” said Bob Oros, executive vice president and head of the RIA segment at Fidelity Clearing & Custody Solutions in a statement. “We’ve been telling firm leaders that they need to go beyond viewing this trend as a threat. Instead, let’s try to understand the motivations of these advisors, particularly the younger ones, so that this becomes an opportunity for firms to gain insights into how to attract new talent and retain their existing workforce.”

So what lessons can be learned?

With 92 per cent of movers suggesting they are happy with their decision and 80 per cent pointing out that they have a better financial position, there are some key pieces of information to take from the survey.

Fidelity suggests that movers are looking for freedom to choose investment strategies that are appropriate for their clients; and for younger advisors an apparent career path is important, along with training and clear communication. For more experienced advisors, who may be critical of the firm, it appears that equity and ownership opportunities are the most important.

Perhaps most significantly, however, the survey points out advisors want more support from their firms – and suggests offering them access to client referral programs and firm marketing and business development support to help them build their books.