In the run-up to the 2024 U.S. general election, expectations about which candidate would prevail created uncertainty in the wealth management industry.
Now, with the election in the rearview mirror, financial advisors – particularly those who are considering switching firms – may be pondering a key question for themselves:
“Have we traded one form of uncertainty for another … and how will this impact me?”
While there are unknowns, there are several key facts that should inform our perspectives on what financial advisor recruiting and transitions will look like in 2025:
- The future is independent. The factors that make the model so compelling remain and indeed are expanding as enterprises are offering a wider range of models, each designed to meet independent advisors where they are, accommodate their ideas of independence and help them drive toward their ultimate goals.
- Interest rates are trending downward. Cash sweep revenue is sure to follow, impacting the bottom lines of large dual registrant enterprises – and perhaps the dollars at some of these firms can align with their recruiting efforts.
- Demographics remain a challenge. There continues to be a shortage of next-generation financial advisors to replace the large number of those exiting the industry over the coming years. Bringing potential successors into a firm will continue to spur recruiting efforts.
- Wealth management continues to be a lucrative investment for private equity. M&A has enjoyed a robust year, and deep-pocketed investors want to keep the profits flowing. Helping RIAs recruit top-tier advisors is central to expanding their footprint and contributing to growth.
Developing A Clear And Compelling Value Proposition
Successful independent wealth management firms, both dual registrant and fee-only, will continue to outpace the competition by keeping an eye on the industry, their rivals and their own ecosystems and pivoting as needed.
Strategically investing in resources that differentiate them within a tight marketplace will separate the winners from the losers when it comes to growing headcount and AUM. Firms must make their case to attract top-tier advisors who know their worth and have clearly defined expectations.
As for financial advisors, partnering with an enterprise that aligns with their values, appreciates them as people and business owners and puts forth a well-defined – and achievable – value proposition regarding service, support and culture, is foundational.
Industry Experts And Their Perspectives For 2025
With all of this context in mind, I recently spoke to three industry leaders who are senior executives with fast-growing enterprises about what they see in terms of financial advisor recruiting for 2025 and beyond, including:
- Julie Davis, Head of MMFA Field Recruiting & Development at MassMutual
- Jeff Cutler, Chief Experience Officer at NewEdge Advisors
- Nate Stibbs, Director of Corporate Strategy at Arkadios Capital
Nash: Are you seeing greater growth opportunities in 2025 and beyond for independent financial advisors who align with wealth management platforms that are part of large insurance companies? If so, why, and what are the specific growth opportunities for financial advisors in this part of the industry?
Davis: Without question, we’re seeing significant growth opportunities next year and beyond for independent financial advisors in this segment of the industry.
This is because, while our industry is always evolving, some things never change in terms of what independent financial advisors need in order to grow. This includes superior infrastructure, a diverse product suite, strong brand support, and ongoing professional development.
Let’s start with how large insurance companies can offer robust infrastructure and advanced technology platforms, and continuously reinvest in them. Access to the right platforms empower advisors to streamline operations, reduce administrative burdens and focus more on client relationships.
Next, access to a broad array of financial solutions and services that help drive client satisfaction and retention is crucial. The wealth management platforms of large insurance companies can accomplish just that, helping advisors cater to a wider range of client needs, while delivering greater value across investment management, retirement planning and insurance.
Moreover, the strong brand recognition and credibility that large insurance companies often enjoy can help independent financial advisors attract and retain clients. Being associated with a reputable company is key to initial trust-building with clients.
Finally, large insurance companies typically offer extensive training and development programs, especially compared to many other segments of the industry. This can be mission critical in enabling independent advisors stay abreast of major trends, regulatory changes and best practices.
The value of association with the wealth management platform of a large insurance company that has a demonstrated commitment to helping independent advisors maintain a competitive edge and deliver high-quality advice is increasingly recognized. We’re looking forward to all that we can achieve for our advisors in 2025 and long term.
Nash: What do you see as the biggest opportunities and challenges for independent RIA enterprises when it comes to driving a superior service experience for newly transitioned advisors that accelerates their ability to start driving further business growth from the outset?
Cutler: For NewEdge Advisors, everything comes back to living our mission of giving advisors more time, margin and flexibility. As an advisor-first firm, we’re focused on creating a transformative experience focused on three core areas: onboarding excellence, advisor solutions and advisor advocacy.
First, it starts with a highly curated onboarding process, with a dedicated transition manager who designs and manages a custom transition blueprint from beginning to end. Our comprehensive transition process leaves nothing to chance, allowing each team to confidently and quickly get back to business.
Once on board, outside of our standard RIA core services, we’ve purposely built a suite of advisor solutions broken into two categories: business services and growth programs. Our business services free up advisors’ time by letting them outsource things like bookkeeping, HR, portfolio management and more. The growth programs are designed to drive new sources of referrals, broaden capabilities and give advisors access to coaching programs that help them create actionable growth strategies.
Finally, our advisor advocate team is the glue to an exceptional advisor experience. All advisors have a dedicated advisor advocate who is a true business and relationship partner. The advocate assists with practice management, platform success and ensuring awareness of value-added solutions. Additionally, the advocate is responsible for helping build community and fostering an environment for sharing best practices by hosting in-person and virtual mastermind-style meetings.
In summary, we recognize that a one-size-fits-all model doesn’t work for everyone, so over the last decade, we’ve focused on building a flexible and supported RIA designed to help advisors unlock their time and growth potential.
Nash: What are the top solutions that hybrid advisors with high net worth clients are seeking for their businesses in 2025, and what is Arkadios doing to address their needs?
Stibbs: The pace of change in our business has never been greater and advisors today have uniquely different priorities that go far beyond traditional investment management. High net worth (HNW) clients have lofty expectations and advisors need to consistently evaluate all aspects of their business to accelerate growth, scale operations and deliver an optimal HNW client experience.
In an industry consumed by commoditized pricing, products and platforms, hybrid advisors (advisors who provide both fee-based and traditional brokerage services) are constantly exploring ways to enhance their value proposition and stand out in a competitive marketplace.
As the industry evolves, advisors who work with HNW clients are focusing on several key areas to better service, retain and attract more target clients, including the following:
Personalized client experience: High net worth clients expect a distinctly unique wealth management experience, including tailored financial advice, custom portfolio management and a personalized service experience.
Exclusive product suite: Wealthy clients seek investment solutions beyond traditional securities. They want exclusive, non-correlated products that complement their core investments. This includes private offerings (credit and equity), real assets, hedge and tax mitigation strategies.
Powerful digital tools: Gaining scale is a key priority for advisors and digital services are essential for managing administrative and operational tasks. Providing clients with a holistic digital experience improves satisfaction, minimizes attrition risk and enhances the overall client experience.
These solutions are designed to help hybrid advisors stay competitive and effectively serve the complex needs of HNW clients in a rapidly evolving financial landscape.
Jeff Nash is Recruiting Trends Expert Columnist at Wealth Solutions Report. He is also CEO & Co-Founder of Bridgemark Strategies, a consultancy that helps financial advisors evaluate and execute transitions, and provides M&A, succession planning and buy/sell guidance.
