The wealth management sector has experienced several unexpected and sweeping changes over the past year, but our industry remains robust despite these challenges.
The first half of 2023 saw the self-liquidation of crypto-darling Silvergate Capital, and then the sudden collapse of California’s Silicon Valley Bank, the largest such failure since Washington Mutual in 2008. SVB was the go-to for the region’s VC-backed startups and held assets totaling over $209 billion at the close of 2022, according to the FDIC.
New York-based Signature Bank followed hard on its heels, suffering a run on deposits less than 48 hours later that forced the New York State Department of Financial Services to shutter the institution and place it under FDIC receivership.
First Republic became the second-largest bank to fail in American history after shares fell 62% from March 10-16. On May 1, the majority of its deposits and assets were sold to JPMorgan Chase and its teams of Advisors migrated to firms such as Morgan Stanley, Rockefeller Capital Management, and Cynosure Wealth Advisors. This closure shook the lucrative and far-reaching San Francisco wealth market, with shockwaves spreading as far as Europe and beyond.
What do the next 6 months hold for skilled and experienced Advisors looking to expand their horizons and discover new opportunities?
Demand continues to grow but the shifting landscape offers unique challenges — let’s take a deep dive into embracing change and transforming the status quo.
A Bright Future for RIAs and Independent Broker-Dealers
Macroeconomic conditions are affecting every industry on a global level. Yet the wealth management space continues to show remarkable vitality, especially for those seeking to move to an RIA or IBD model.
Transition deals are more competitive than ever and a burgeoning number of Advisors are changing lanes and unlocking their potential in the Independent Broker Dealer and RIA space.
One such enterprise, $10B tru Independence, recently launched Sykon Captial, “a wirehouse breakaway fueled by creativity, ingenuity, and newfound independence” that’s focused on providing highly personalized and client-focused service, according to Business Wire.
Rockefeller Capital Management nabbed a top-of-the-line team from UBS Wealth Management to establish their flagship practice in Austin — Ladage, Smith, and Garcia Wealth Partners. The capital of Texas and booming tech hub is the second-fastest-growing market in the US and an attractive target for firms such as Merrill Lynch and JPMorgan Advisors. But it’s also home to a fiercely independent spirit that values local businesses over conglomerates from Back East.
Organizations like LPL, Raymond James, and Ameriprise saw mind-boggling levels of recruitment in 2022, bringing on hundreds of billions in assets. Continuous reinvestment in Advisor growth resources is key as the industry faces several disruptive trends in the coming years.
The wheel is turning and today’s professionals are on the hunt for scalable solutions they can balance with an individualized and client-centric approach.
A Shifting Paradigm
Perceptive Advisors should cultivate adaptability to evolving market dynamics and the ability to stay at the bleeding edge of industry best practices as part of their essential skillset.
There are many myths and misconceptions out there when it comes to recruiting in the wealth management space and the best path to success for a candidate that’s ready to leave the wirehouse for a more effective seat.
Transition packages may offer up to 100% of gross dealer concessions (GDC), but it’s not all about compensation these days. Savvy Advisors are working with specialized and expert recruiting consultants like TERRANA GROUP to land deals that also feature the perfect fit with vibrant company culture, professional growth and mentorship, or book buying and succession opportunities.
But building and maintaining strong relationships is critical for scaling your practice sustainably and aligning with your North Star. That’s why our one-on-one approach is so compelling and produces tremendous results for Advisors desirous of a seismic shift in their perspective.
In the midst of an uncertain economic climate, today’s investors are thinking in new ways, setting different expectations, and asking tough questions.
While consumers crave the latest technology, they’re simultaneously searching for more human connections and investment advice with a personal touch. The demographics are evolving as well, as baby boomers give way to Gen X, millennials, and those creating wealth from tech or digital content.
To meet these demands, Advisors need insight, experience, and a vital support network. The current market might not be the most nurturing for budding entrepreneurs, but anything is within your reach when you partner with one of the country’s most venerable specialized recruiting firms.
These are interesting times, and the ups and downs of the past few months highlight the resilience of the wealth management space and the resolutely expanding opportunities for success. If you’re ready to take the next step and boldly move forward, contact us today!
