Seven Trends That Indicate It’s a Seller’s Market for Advisors

Despite the mark that COVID-19 continues to leave on the economy and the world over, there’s good news to report as we make our way out of 2021: Advisors crushed it.

A year of extraordinary success—in how advisors increased revenue, creatively served clients and managed their business lives—set forth another evolutionary shift in the wealth management industry that rose out of 2020 and laid a solid foundation for 2021.

It’s a confluence of events that positioned advisors securely in the driver’s seat this year. On the one hand, brokerage firms have been slow to acknowledge just how frustrated many of their advisors are with the status quo. While on the other, leaders outside of the brokerage channel continued to pay close attention to what advisors value most—freedom, flexibility and control—and responded by creating exciting new firms and models that match advisors’ needs. The result is increased competition for top advisor talent that has fueled a “seller’s market.”

And it’s this very theme that served as the backdrop for trends over this year.

In part one of this two-part series, we look at the top seven trends of 2021. And in a forthcoming companion piece, we’ll explore how these trends may impact 2022 and beyond.

1. The state of advisor movement: Record levels—again.

As predicted a year ago, the pace at which advisors are changing firms and models continues to be strong. From our own experience in transitions that we facilitated, asset movement surpassed 2020 levels by the beginning of the fourth quarter. Industry-wide, nearly one in 10 advisors moved in 2020, and once the ink dries on 2021, we expect to see similar activity.

What’s motivating advisors to change?

• The number of models and options has expanded exponentially, making it more likely that an advisor will find their perfect fit.
• Wirehouses are back in the recruiting game in a major way—offering a real option for those who prefer to work for a big brand in a turnkey environment. 
• “Lifers”—those who built their careers at the firms from which they expect to retire—are reconsidering their loyalties, spurred by their next gen team that might be questioning whether a better option for their clients and business might exist elsewhere.
• Movement begets movement, and as the flow of top advisors and well-respected Lifers increased, others joined the momentum.
• Advisors are having record years—and it’s advantageous to move when business value is at a high point.
• Concerns over COVID protocols, work-from-home policies and vaccine mandates led advisors to consider other options that better aligned with their own beliefs.

And many advisors have shared that 2020 was a wake-up call that brought to light not only the frustrations they may have been feeling—including too much bureaucracy, prioritization of the firm agenda and loss of control—but also the pulls toward something…