Why advisors really leave — and what firms keep getting wrong about recruitment

Advisor recruitment has always been seen as a shorter path to growth. A single hire can bring an established book, recurring revenue and a referral network that would otherwise take years to build organically. But according to Sanjay Kulkarni, Chief Revenue Officer at Croesus, most firms are still fighting for advisors with the wrong playbook.

"Some firms assume it's only about the comp package," Kulkarni says. "In our conversations with wealth firms across the country, compensation doesn’t always come up first. What comes are product limitations, challenges with technology, and not knowing what will happen to their book when they're ready to slow down."

That distinction matters more now than it has in years. Regulatory changes are widening registration pathways for tens of thousands of mutual fund advisors, and a wave of senior advisors is approaching retirement without a clear succession plan in place. The combination is creating what Kulkarni calls "one of the more active windows for advisor movement we've seen in some time" — but he's quick to add that opportunity and execution are two different things.

The technology tipping point

Kulkarni points to technology as the most underestimated driver of advisor attrition. What used to be considered back-office plumbing, he argues, is now something clients see and judge every day.

"An advisor's credibility is on the line every time they log into a platform in front of a client," Kulkarni says. "We hear this constantly from advisors in transition – telling us stories about how they're tired of apologizing for slow reporting, or for onboarding that takes weeks instead of days. That's not a technology problem anymore. That's a trust problem, and it can be the type of thing that prompts an advisor to start quietly looking around."

He notes that this shift has changed what advisors ask for when they're being recruited. Rather than simply asking about payout grids, prospective hires want to see the platform, the reporting tools and the workflow in action.

"They want proof the firm can help them scale," he says. "If you can't show that in the first conversation, you've already lost some ground."

Product architecture plays a similar role. Kulkarni says advisors increasingly see themselves as holistic planners rather than product distributors, which puts firms with proprietary shelves or limited menus at a disadvantage. "Open architecture isn't just a technical detail," he says. "It's a signal to the advisor that they'll have the independence to actually serve the client's full picture."

The succession conversation firms avoid

For Kulkarni, the most overlooked opportunity in recruitment isn't attracting younger advisors, it's supporting the more established advisors who are looking to exit.

"For a lot of established advisors, growth isn't the question anymore: exit is," he says. "Who buys the book? On what terms? How do they protect the client relationships they've spent decades building? Most firms don't have a good answer for this, and that uncertainty is exactly what pushes advisors to start looking for other options."

Firms that can offer valuation guidance, a documented succession framework and real transition support, Kulkarni says, are winning both the advisor and the assets attached to them — often before a competing firm even gets a meeting.

Why the offer letter is only the starting point

Kulkarni is direct about one of the more common mistakes he sees: treating a signed advisor as a finished deal.

"The transition period is where advisors form their real opinion of the firm," he says. "Licensing, compliance, client transfers, getting set up on new systems — if that process doesn’t go smoothly, the advisor is judging you before a single asset has even moved over."

He argues that the firms seeing the strongest AUM growth from recruitment are the ones that treat onboarding and enablement as part of the same strategy as the hire itself. They invest in portfolio management tools, automated rebalancing, reporting infrastructure and practice analytics that help advisors identify where they can grow.

"Recruiting the advisor creates the opportunity," Kulkarni says. "What you build around them afterward is what actually converts that into growth."

What Croesus suggest firms focus on

Asked what advice he gives wealth firms trying to compete for advisor talent, Kulkarni keeps it practical.

"Start by being able to answer three questions clearly: why should this advisor join you, what does the transition actually look like, and how will their practice grow here," he says. "If you can't answer those types of questions with specifics, then technology and compensation won't save you."

He also points to data as an underused advantage. "Firms are sitting on more advisor and practice data than they realize. When it’s used well, it tells you which advisors are close to a decision and where the growth potential actually is — instead of you trying to guess."

Above all, Kulkarni cautions against treating recruitment as a one-time event. "The firms that will win the next few years of AUM growth aren't the ones that hire the most advisors," he says. "They're the ones that make the transition painless and keep investing in that advisor's growth long after the ink is dry."

Sanjay Kulkarni is Chief Revenue Officer at Croesus, a wealth management technology provider.

This article was produced in partnership with Croesus