Mega-Moves: What’s Driving the Movement of Advisors and Teams Managing a Billion or More?

Change is typically motivated by a combination of pushes and pulls. Yet in the case of advisors managing $1B+, those factors are even greater.

2021 is proving to be an extraordinarily active year of movement amongst advisors at all levels, following on the heels of a record-breaking 2020.

Yet it’s the top advisors, those managing in the billion-dollar plus range, that often garner the most attention—and for good reason. A move at any size comes with disruption and risk—each of which is exacerbated when the business is bigger and more complex.??

With over 30 such moves as of this writing, one must wonder what’s driving this activity. That is, what catalysts are powerful enough to make this upper echelon talent leave the comfort of a very familiar nest to undertake the herculean effort of changing firms?

The reality is that advisor movement is driven by a combination of pushes and pulls: The “pushes” of frustrations and limitations, and the “pulls” toward something more exciting or that demonstrates greater potential and enhanced freedom and control.

Consider UBS veteran Max Peckler who transitioned to First Republic Wealth Management in November of this year. Managing just shy of $1B, Max was the first to admit that the status quo had been good to him. But he was attracted to the potential of serving his clients in ways that felt less limiting and the opportunity to accelerate growth. First Republic aligned with everything he was looking for and then some.

Like Max, there are plenty for whom independence just isn’t the right fit. For example, Lee A. Sperling built a business managing $4B at J.P. Morgan Private Bank. His July transition to Morgan Stanley represented one that was likely guided by a desire for more investment flexibility and control than he had in the private banking world. Plus, the desire to get to a non-bank owned firm where there was greater potential for better technology and?platform.

On the other hand, in September, siblings Scott and Brett Bills and their team left Merrill with $1.75B in assets to launch RIA Nilsine Partners with Dynasty Financial Partners. As Scott shared in a press release, their goals were based around expanding offerings to better serve their clients and accelerate their growth—but without the limitations of operating within the confines of a larger organization. “We now have the ability to be solutions based, not product driven,” Scott stated—and it’s that very notion, along with the prospect of building equity in an enterprise that’s truly their own which is one of the strongest pulls toward independence.

So what are some of the common pushes and pulls that motivate advisors to consider change?

The Pushes

• Too much bureaucracy – More stringent compliance and management to the lowest common denominator limits advisors in their ability to serve clients and grow their businesses.
• The loss of control – As firms tighten the reins, advisors are forced to fit a mold which may not suit their business and can hinder their ability to thrive.
• Changes to compensation – Advisors are doing the math and realizing that as firms take a bigger slice of the pie and defer it for longer periods of time, they may stand to lose more by staying.
• Changes in culture – Culture has come to play a much stronger role in the decision to make a move, as many are searching for an environment that “once was.” That is, where there is a greater connection between the firm’s ideology, leadership and their advisors. This is one of the reasons that boutique firms like Rockefeller Capital Management and First Republic Private Wealth Management, and the regionals are winning the race for top talent.

The Pulls

• To obtain greater freedom, flexibility and control – While a firm may be serving an advisor well enough, it’s not uncommon to simply “want more” in terms of increasing the ability to build a business and serve clients.
• To monetize in the short term – With deals at a high watermark, advisors are seeing an opportunity to opt for a lucrative upfront transition check via a recruitment deal and potentially improve their business lives at the same time.
• To build an enterprise and equity value – Advisors willing to play the long game and who are focused on building an efficient and scalable enterprise will be rewarded with a higher valuation at the end of the day.
• The desire to accelerate growth – Whether it be to gain a referral mechanism, the ability to customize the client service experience, or even the potential that a new firm’s brand may resonate better with clients, advisors are drawn to the ability to enhance their bottom line.

Advisors move when there are catalysts significant enough to have tangible impact upon their ability to “get it done”—that is, service their clients and grow their businesses.

But for some advisors – especially those who have a strong entrepreneurial spirit – exploration is often opportunistic, because the reality is that what’s before them just isn’t “enough.” And it’s that very notion that serves equally as a push and a pull towards something better.

As ex-Wells Fargo advisor turned CEO and co-Founder of $8.5B+ GYL Financial Synergies, Gerry Goldberg, described it in a recent podcast interview with me: “It’s very easy for those of us who were successful within wirehouses and elsewhere to say, ‘You know what, I’m making a good living. If it ain’t broke, don’t fix it.’ But why let the powers of inertia continue to carry you forward? If we had done that, we would have missed out on the opportunity of a lifetime.”

In a world where the waterfall of possibilities has expanded tremendously, a better business life is achievable for just about every advisor—and it’s that very notion that is creating a wave of movement like never before.

As seen on Forbes.com.

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