Virtual Attraction

A giant 100-adviser team worth $3 billion that recently left Securities America for LPL Financial started its move near the start of the year and just completed it in April.

“We began the first wave of advisers moving to LPL in January,” said Jack Connealy, president of JFC Financial Services in Lincoln, Neb. “As it turned out, the guys back then were the lucky ones.”

But the coronavirus, while dangerous, surprisingly enables advisers who move to a new firm to more easily find their clients to inform them they are leaving one firm for another and to take care of nettlesome paperwork. No one is taking vacations or traveling to visit the grandkids right now.

“The biggest stress toward the tail end was the financial markets more so than the pandemic,” Connealy said. “The pandemic means clients are at home and available to do e-signatures to transfer accounts. In terms of efficiency, we’ve moved a lot of business in a short period of time.”

There is no doubt recruiting has slowed as the financial advice industry deals with broad changes caused by the coronavirus.

According to InvestmentNews Research, the brokerage industry had 1,891 adviser moves in January, an increase of 22% when compared to the same month in 2019. But from February to April, the industry saw 2,842 such moves — a decline of 23% when compared to the same period a year earlier. 

Senior executives at brokerage firms remain optimistic about recruiting, which is an essential part of many firms’ business strategies, even in the face of chaotic markets and the COVID-19 pandemic. Recruiting pipelines are still brimming and interest among potential adviser recruits remains keen. 

“Looking more closely at recent recruiting activity, January and February were some of our highest months of pipeline growth,” Dan Arnold, CEO of LPL Financial, said on a conference call with analysts at the end of April to discuss first-quarter earnings. “Then in March, activity slowed as advisers focused on serving their clients through the market volatility and transitioning to work from home. As the climate stabilized in April, advisers had more time to work on the strategic elements of their businesses, and our pipeline growth returned to levels similar to January and February.”

“While our financial adviser recruiting pipelines remain strong, we have ramped up virtual recruiting and on-boarding activities,” Paul Reilly, CEO of Raymond James Financial, said on a conference call last month with analysts to discuss quarterly earnings.

“Traditional recruiting efforts will be impacted by the travel restrictions and even the comfort levels of in-person meetings,” Reilly said. “The near-term impact on recruiting results is uncertain, but it seems likely that even with the strong pipeline, there will be delays, and they will be disrupted until restrictions are lifted and people feel comfortable traveling and in meeting in person again.”

“I would not likely look to change firms right now.”

Andrew Daniels, managing principal at Commonwealth Financial Network, said that while recruiting was certainly slower in March and April, the balance of the second and third quarters looks solid, both in terms of new contacts with prospective advisers and advisers joining Commonwealth.

“We are hosting virtual home office visits with increasing regularity and, compared to a phone call, using Zoom or Teams actually increases the human connection with prospective advisers, either directly with the recruiter or with key members of the home office,” Daniels said. “The only thing we have lost in this era is sharing the live energy and community feel of the home office.”


“Broker-dealers can recruit successfully through a pandemic, but the biggest issue is everything ends up being done through the computer or via mail,” said Jon Henschen, a longtime industry recruiter. 

“When advisers make a change of broker-dealer, especially with their A- and B-list clients, they want to meet the client in person and have open discussions about the reasons for their move and how it will benefit the client,” he said. “They can’t do that during a lockdown, so it has to be done on Zoom, which is an option but is not the preferred way to conduct communication with better clients.”

“If I were an adviser today, I would not likely look to change firms right now,” said Larry Roth, the former CEO of Advisor Group and Cetera Financial Group, who’s currently an industry consultant. “Even though the equity market has improved, there is still a significant lack of clarity around how client portfolios will perform.

“And there could be more havoc with stocks, and advisers don’t want to move their book in that type of environment,” Roth added. “Advisers could move in the next quarter and are probably looking right now when the market is a little calmer.”


Recruiting is changing, with firms emphasizing so-called virtual visits to the home office instead of old-fashioned meet and greets. But can virtual recruiting, with interviews over Zoom instead of over a steak dinner and a bottle of wine, work?

Raymond James, for example, recently halted visits by potential recruits to its home office in St. Petersburg, Fla., according to industry recruiter Danny Sarch, who works with the firm. 

“The firm very quickly created a way to do so-called virtual recruiting,” Sarch said. “It stopped home office visits but can still give people a good feel for the firm without the risk of travel.

“But it’s rare to get people to commit to a full day remotely, unlike when advisers visit a firm’s home office to kick the tires and talk to senior managers,” Sarch said. “With virtual recruiting, you book an adviser’s time for two to three hours, and he or she has the advantage of having that conversation in the privacy of home. Another advantage right now is that it’s actually easier to get senior leadership in these Zoom meetings right now because no one is traveling and can’t talk because they’re on a plane.”  


Another broker-dealer, Cambridge Investment Research Inc., is tweaking the virtual recruiting recipe a bit and actually adding a staff person who travels to a destination and hosts the video conference with the prospects, said Amy Webber, CEO of Cambridge. 

“Instead of 100% virtual, we send one person to the meeting, with social distancing, and rent office space,” she said. “He or she wears a mask and facilitates the virtual meeting with staff at the home office. We had a meeting with prospects like that in Oklahoma and Atlanta. We haven’t sent anybody to a hot spot like New York yet, and we may have to hold off on that for a while.”

[Recommended video: ]

Written by Investors Wallets

The power of pivotal moments

Wells Fargo’s market value is down $220 billion since Fed cap