Many big-name firms have announced plans to slim down on their number of regional divisions and geographic regions. This comes as many try to find ways to cut costs while simultaneously trying to meet new demands and find greater efficiencies.
But do these changes ignore the inherent differences of traditional geographies (ie: Middle States vs. Coasts, North vs South, places that call carbonated beverages “pop” vs. places that are wrong….).
Unsurprisingly, despite best intentions these regional shakeups happening across the industry have been met with some backlash from advisors.
Back in January, Morgan Stanley announced that they were restructuring the firm and decreasing the number of geographic regions from seven down to four. As a result, there have been some changes to leadership as the firm had to make changes in the roles of regional directors for three regions.
After the change was announced, some advisors and executives at the firm had voiced how disruptive the move would be to advisors, with the changes to their primary point of contact. Many aren’t sure that the move would save enough in terms of cost to warrant the kind of disruption that it will cause.
Much like Morgan Stanley, Wells Fargo announced recently that they too will be slimming down their regional divisions from seven to four in their wealth division. After posting a net gain in advisors for the first time in a few quarters, advisors are concerned about what the cost-cutting move will do to their recruiting and retention efforts.
Advisors also have concerns about the levels of leadership and support that they’ll receive. The consolidation of three regions will ultimately lead to strong leaders having to take on a different role away from the field. Advisors are taking the move as a sign that they’ll be given less support, which could also affect recruiting.
Chances are we haven’t seen the last of firms announcing changes to the regional divisions. As more firms follow in the footsteps of other industry leaders and trim their regional divisions, we could start to see more movement from advisors.
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