The Age Of The Wirehouse Is No More; The Numbers Don’t Lie

A decade. Ten years later, the landscape is predictably different than what financial advisor veterans remember.

In late 2008 and creeping into early 2009, names like Merrill Lynch, UBS, Morgan Stanley, towered over the wealth management industry with legions of brokers with the best office addresses, widely held positions on the Barron’s 100 list, and golden handcuffs that were actually golden and gilded.

We know how and why that changed almost overnight.

But where we are today is another pivot point that most probably didn’t foresee a decade later. Regionals (and it probably isn’t fair to categorize these firms as ‘regionals’ anymore) are gobbling up high profile teams across the country in baskets full. Ameriprise, Stifel, Janney, Raymond James and upstart Rockefeller Capital Management are filling seats and opening new offices at a pace not seen in the industry in years.

Two specific dynamics stick out that have pushed advisors into the arms of these firms: the colossal misstep by wirehouses to bail out on the protocol, and the movement by these same firms to box in advisors with fine print on a near annual basis when further changes (read: reductions) occur in their payout grids.

The narrative inside wirehouses for far too long has been ‘brand is better than broker’ – and the industry has finally reached a breaking point.

Stifel has tripled its recruiting success in the past two years versus the previous two based on the above dynamic. And they’ve done little to ‘juice’ their recruiting deal. They’ve simply executed on the truth of their narrative and picked up the pieces of old wirehouse culture that empowers advisors, rather than neutering them.

Ameriprise has found a way to offer a near class leading deal and coupled it with a seamless move to the independent space ‘in-kind’ should an advisor or team choose to do so.

**Actually as of this writing Ameriprise has scaled up their deal again for elite teams to nearly 370-400%.**

As of the past three months another player has emerged, Rockefeller Capital Management. They’ve been grabbing billion dollar teams from wirehouses in money center cities across the US left and right. Greg Fleming and his team seem to have their legs underneath them and have taken off.

The larger narrative remains as such – the wirehouses (and the banks that either own them outright or have significant equity stakes in their operations) haven’t made a meaningful correct step in the direction of advisors in years.

It’s well known that pain and fear are competing emotions when it comes to change. Most individuals will endure pain for long periods of time if the fear of change outweighs their current pain. That is true of a move down the perceived wealth management ‘business card/logo’ competition.

But now, the numbers simply don’t lie – the pain has been overwhelming, and the fear has subsided. Advisors have become quite comfortable leaving organizations like the ’Bank of Merrill’ for friendlier confines. Stifel, Ameriprise, Raymond James, etc are more than happy to welcome them with open arms.

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