Why Wirehouse FAs are Jumping Ship: Pay Changes, Cross-Selling and more ...
Concerned about changes to their pay structure, cross-selling and other issues, hundreds of financial advisors left wirehouses last year opting for a different type of firm, according to news reports.
In all, 235 individual financial advisors or teams overseeing $61.5 billion jumped ship from the big four wirehouses to work at RIAs, independent broker-dealers, hybrids or regional brokerages in 2018, InvestmentNews found. Chief among the reasons for the departures cited by recruiters is the potential shift at wirehouses to pay salaries and bonuses, according to the publication.
Merrill Lynch’s recent decision to put 300 salaried advisors assigned to its digital advice offerings into traditional wealth management branches, for example, is "really putting it in the face of the FAs," Jerome Lombard Jr., president of the private client group at regional broker Janney Montgomery Scott — which has lured several Merrill Lynch advisers in recent months — tells InvestmentNews.
More senior wirehouse advisors are also concerned they’ll be thrown under the bus for minor infractions such as “an honest mistake about expenses,” and many are wary of having to cross-sell their firms’ banking products, Mark Albers, an industry recruiter, tells the publication.
"Recruits are telling us they feel there is an intentional disintermediation of their roles by putting clients into other channels of the bank,” John Pierce, head of recruiting at Stifel Financial — which poached several advisors from Merrill Lynch and Wells Fargo Advisors last month — tells InvestmentNews. “This makes advisers less important to their mass-affluent clients. New advisers working on an alternative pay scale only adds to that."