Merrill’s suffering advisor outflow — but they’re not the only ones
Financial Planning
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WIREHOUSES: For the second time in just over a week, UBS Group is announcing the recruitment of a wealth management team overseeing billions in clients assets from its rival Merrill.
The Swiss banking giant, with nearly $3 trillion under management in the U.S., announced on Monday that its private wealth management had added an eight-person advisory team named Hammond Fay Bush and Associates to its offices in Northbrook, Illinois. Members of the group previously had $1.6 billion under management for ultrahigh net worth clients and families at Merrill.
The two recruiting moves show Merrill's continued struggles to retain top advisory teams. Executives at the firm said in a recent earnings call that Merrill's annual attrition rate — the proportion of its advisors who leave in a given year — has been hovering around its historic average of 4% and has even shown signs of improving in recent months.
But many in the industry point out that that nominally low figure obscures the fact that many of the teams leaving are those with the most experience and strongest client relationships.
RECRUITING: Merrill, despite recent news, isn’t the only wirehouse fighting to keep advisors in house as the lure of independence or other large firms grows.
This month, Dan Shaw wrote our next magazine cover story on the ability — and sometimes lack thereof — of wirehouses to attract and keep advisors.?
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From the story:
"They've been all fighting over the same talent since the beginning of time, and they'll be fighting after we're long gone," Rummage said. "The truth is, whether it's JPMorgan, whether it's RBC, whether it's Raymond James, whether it's LPL, they're all fighting over the same talent." — Rick Rummage, an industry recruiter and the CEO of The Rummage Group
TECHNOLOGY: As big-name wealth management firms race to invest in and adopt artificial intelligence technology, financial advisors will become fast friends with the robots, according to experts.
The increasingly popular form of generative AI known as large language models (think of OpenAI's ChatGPT bots as an example) can bring automation to many manual tasks for advisors and their teams, deliver greater scale in working with more customers at once and help wealth management firms identify leads for potential long-term client relationships. Rather than viewing AI as a threat, advisors and industry professionals ought to see the technology tools as "a historic opportunity" for the field, said Sindhu Joseph, CEO of AI wealthtech firm CogniCor.
"The tools are out there, and the trend is going toward an AI-enabled advisor," Joseph said in an interview. "It becomes a real disadvantage for advisors not using AI because the others are going to supercharge, and you will be missing out if you are not using AI tools."