Lack of Control is Driving Advisors Away from Wirehouses
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
When you’re an employee, there’s very little within your control. Even advisors managing successful practices at a wirehouse are constantly frustrated by decisions being made – beyond their control – that impact their businesses.
The wealth management industry has been going through a seismic shift for the past several years, and part of the disruption is the steady exodus of wirehouse advisors setting out for independence.
Why the movement? There are many practical and arithmetic answers, but the emotional component begins with the hunger to be a true entrepreneur coupled with the frustration that builds every time wirehouse management demonstrates just how little control their advisor employees have. Meanwhile, the planning profession has caught up to that demand with technology and platforms to provide everything independent advisors need to successfully launch their own business.
Oftentimes, a change to compensation plans is at the root of advisor frustration. This is especially true during a down market, when advisors, who are mostly fee-based, are already feeling the pressure of decreased income and increased client anxiety. For management to reduce grid levels and commission payouts, and raise hurdles for punitive programs like the “growth grid,” indicates that it is not an advocate for advisors’ success. Moreover, for management to position such changes as positives is disingenuous. Such actions are a betrayal and remind advisors where the control lies at a wirehouse.