Get ready for firms’ recruitment efforts to ramp up

Wealth management firms continue to woo experienced advisors away from competitors, industry executives say, despite the Covid-19 pandemic. After a slowdown from March through May, the pace of advisors switching shops has picked up again, and firms’ active recruiting efforts are expected to accelerate through the summer and fall.

“The timing was delayed a bit, but now we see more advisors are going to be joining in June, July, August and September,” said Steve Galimi, vice president of strategy and performance with National Bank Financial in Montreal. Galimi said the pace of onboarding new advisors remains contingent on how re-opening the economy unfolds.

“We think the fall [will be] pretty good, with a lot of teams landing at that time,” said Danny Popescu, president and CEO of Harbourfront Wealth Management in Vancouver.

Harbourfront, an independent shop that typically adds about one new advisor per month, has continued to target advisors with books of business in the $100 million–$500 million range throughout the spring. Popescu said the pandemic and general market volatility have proven to be a “good environment” for recruiting advisors.

“What it does is disrupt advisors and it gets them to look at a little closer at their current dealer [and to consider a move],” Popescu said.

In May, Harbourfront announced it had recruited Sea Glass Wealth Advisory Group in Surrey, B.C., a $100-million-plus, four-person book of business led by financial advisors Kristina Thomas and Tracey Lundell.

During the first week of June, NBF made two recruiting announcements: Bill Acorn, senior investment advisor heading the three-person Acorn Financial Group, joined the firm’s Vancouver office; and Catherine Ayotte, an investment advisor heading a two-person team, joined in Winnipeg.

Also in early June, Raymond James Ltd. announced it had recruited Struthers Wealth Advisory Group, led by senior wealth advisor Jim Struthers, to its offices in Edmonton.

In a statement provided to Investment Executive, Ed Dodig, executive vice president and head, private wealth management Canada at CIBC Wood Gundy, said that “retaining and attracting client-focused advisors is an ongoing priority for our CIBC Wood Gundy team. We have increased our hiring efforts in recent months and remain active at this time in finding quality advisors who can help our clients reach their ambitions.”

NBF has identified growing its advisor force — both by adding experienced advisors as well new recruits — as a strategic goal, Galimi said. He said there’s now “a few more firms looking to recruit than a few years ago.” He estimated that over the last three years of “competitive recruiting,” 85% of advisors that joined NBF have come from other bank-owned brokerages.

Galimi said that NBF looks at the size of an advisor’s book of business and amount of revenue, as well as other criteria, to identify good prospects. However, NBF also places a significant emphasis on cultural fit. “It has to be the right fit for us and for them as well,” Galimi said.

Popescu said Harbourfront’s pitch to advisors has been focused on greater autonomy and better technology relative to bigger players, as well as an ownership stake and access to alternative products, such as private debt. However, Popescu acknowledges that some advisors may be reluctant to switch firms during a pandemic and at a time of market volatility.

“Some of them don’t quite have the confidence in themselves,” Popescu said, “and they may feel that their clients may not follow them, given the recent downturn. That’s unfortunate…because if you know as a fiduciary that some better opportunities exist elsewhere, putting [your clients’] interest in front of yours means going through that uncomfortable exercise [of switching firms].”

In addition to its competitive recruiting, NBF remains committed to hiring new recruits, Galimi said, with “the vast majority” joining as associates to experienced advisors, and the remainder starting as “standalone” advisors building a book from scratch. Galimi said NBF has added about 70 new recruits over the last three years.

“It’s a way for our experienced advisors to still have growth with new clients and new assets, but also start to plan [for the] succession of their business,” Galimi said.

At Manulife Securities Inc., the approach to recruiting has been focused on “deepening our relationship with our existing advisors,” said Brian Woolley, senior managing director of advisory services and head of insurance, Manulife Securities Insurance Inc. This, Woolley said, includes supporting advisors’ insurance product needs.

Manulife attracts the next generation through an associate advisor program, which allows its existing advisors to “select and train advisors new to the industry, who will go on to help support their existing practice” and possibly be part of a succession plan, Woolley said.

Through the pandemic and the current period of market volatility, Manulife has relied on one-on-one coaching — a “cornerstone” of the associate program, Woolley said — to support junior advisors. The firm also recently presented a webinar specifically focused on helping “advisors new to business make the adjustments they need to continue to do their financial planning and [provide] advice.”