Financial Advisor Retention in 2023

Retaining top-ranked financial advisors 

Last month, our contributors shared their opinions on the broker-dealer talent war and how to attract top producers. Of course, advisor recruitment is only one ingredient in any recipe for growing a wealth business; retention is another.  

Broker-dealer leaders are acutely aware that building a competitive wealth business depends on retaining top-ranked advisors and increasing revenue per advisor. 

Advisor retention is a multifaceted issue and one that Oren Chaplin says doesn’t have a “one-size-fits-all” approach. We think that getting the wealth technology platform right, delivering an integrated solution that creates efficiency and advisor productivity, can be a barrier to exit for advisors. 

In this issue, contributors Oren Chaplin, Jim Frawley, and Patrick Noonan discuss how to retain advisors, the challenges of retention, and the role technology has on financial advisor retention.  

Cynthia Stephens 

You have them, now how do you keep them? 

Now that the hard work of recruiting a financial advisor is over, how can you retain your talent? 

“Advisors are business owners, so it’s about the value that you bring to them,” said Jim Frawley, CEO and Founder of Bellwether. “It’s a two-way street—retention will depend on investments in technology, support for new initiatives, safe risk, and providing the utility to allow them to be flexible and meet their clients where they are.” 

“Retaining talent involves continually improving the user’s efficiency and providing a robust advisor and client experience,” said Patrick Noonan, Product Manager at Advisor360°. “To get there, you need to understand your advisors’ needs and pain points. Once we can identify an area to automate or better integrate, we are able to deliver real value to their practice and help keep them as a customer.” 

“Companies that have greater success with retention seem to be those that are proactive in identifying the personal needs of talent,” said Oren Chaplin, Co-Chair and Business Lawyer at Pashman Stein Walder Hayden P.C.

“In the past few years, the labor force has been significantly bolder about stating their wants and needs at work. More options in terms of remote work, flexible hours, and unique benefits have given workers more fluidity and negotiating power with employers. Employers are becoming more aware of the extra effort they must put into improving the employee experience and retaining top talent," said Logan Mallory in an article titled Help employers provide workers with benefits they actually want from Insurance Newsnet. 

Mallory continues, “to remain competitive in this changing work landscape, companies must start thinking outside the box and offering more unconventional and enticing benefits if they hope to attract and retain top-notch employees. If your employer clients are not making changes now, their employee retention rates will be impacted.” 

“Firms must consider how they do business compared to the way other employers do their business, asking such questions as ‘how does our technology platform stack up with others?’ and ‘what are others doing that we are not doing and why are we not doing those things?’,” said Chaplin. 

“There is no ‘one-size-fits-all’ approach,” Chaplin continues. “Just as customers and clients have individual needs and wants, so do employees, and the right strategy will be one that takes into account the particular situation of those employees and where the company itself sits in its market while not sacrificing the core values and the best interests of the company.”  

“There is no ‘one-size-fits-all’ approach.”—Oren Chaplin 

The challenges surrounding advisor retention 

“An employee who develops their craft, undertakes more responsibility, and nurtures their relationships with customers and clients will likely experience an increase in their marketability,” said Chaplin. “Competitors will come calling and no firm should lose sight of this possibility. Welcome employee growth and work to identify ways to create a long-lasting relationship that meets the needs of both sides.”  

Frawley elaborates further, suggesting the direct correlation between talented advisors and successful firms. “The firms that are at the forefront of building an offering that offers flexibility will have the pick of the litter amongst advisors. Retention at other firms will be affected by this, as the better advisors will be looking to go to the more flexible platforms.” 

The FinTech dilemma 

Does the FinTech industry face more or less challenges than other industries when it comes to advisor retention?  

“The most significant challenges I see for the FinTech space regard seamless integration. Kitces recently identified 409 different software solutions—that is a lot of options for advisors to consider,” said Noonan. “Having separate systems with different processes with repetitive data entry is not efficient. The ‘swivel chair’ is frustrating to advisors and their staff and can be a blocker to some advisor when considering bringing on any new tools.” 

“It depends on the perspective,” said Frawley. “FinTech is still new and very much evolving. It will be doing the dance between innovation and regulation and pushing the boundaries of each. There are challenges in this, similar and different to other financial and tech firms. There will always be challenges, FinTech’s are just unique.” 

“There will always be challenges, FinTech’s are just unique.”—Jim Frawley 

The role of technology in advisor retention 

“A firm’s technology offering plays a major role in retaining advisors,” said Noonan. “Fifty-three percent of respondents in Advisor360°'s 2022 Connected Wealth Report said they consider their technology platform to be an extension of their practice. It is imperative that firms provide innovative and integrated tools to help advisors manage and grow their practice. The survey also showed that 65 percent of advisors have lost clients or prospects because their wealth management tech didn’t meet expectations. To keep advisors, you need to make sure your client portal is helping them keep their clients.” 

Frawley agrees with Noonan that the role of technology is significant in advisor retention, but he shares a caveat. “The role of technology is significant if it’s good. It’s tough to keep up, but as much as technology can be enlightening, it can be incredibly limiting as well. In such a regulated industry, there are unique challenges to adopt new and changing tech that can be a difference maker for the advisors.” 

“To keep advisors, you need to make sure your client portal is helping them keep their clients.”—Patrick Noonan 

Please leave a comment and let us know how you enjoyed this conversation around advisor retention. To see what advisors are saying about their firms’ tech stacks, read our Connected Wealth Report here.  

About our contributors: 

Oren Chaplin, Pashman Stein Walder Hayden P.C. 

Oren Chaplin serves as co-chair of the firm's Corporate & Business Law practice, is a corporate and business law attorney who acts as outside general counsel to businesses and business owners on legal, compliance, and contracting issues in both regular operations and special/extraordinary transactions and initiatives.   

Jim Frawley, Bellwether 

Jim Frawley is Chief Executive Officer and Founder of Bellwether. Jim and Bellwether build resilient organizations and people by helping them plan for and respond to change through bespoke executive coaching and customized workshops.  

Patrick Noonan, Advisor360° 

Patrick Noonan is the Product Manager for Wealth Management and Insurance. Backed by his years of experience as a Certified Financial Planner (CFP?), Patrick defines and oversees product features that improve broker-dealer, advisor, and investor performance and efficiencies in the banking, investment, and insurance industries. 

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Learn more about technology in retention here:  

Recruiting and Retention

What role does the advisor experience play in recruitment and retention? Richard N. Hart III of Advisor360° and Nick Diodati of Charles River Development discuss.