Q3 Influencers Poll Points to Recruitment Gains in Banks and Credit Unions
We devoted the second day of the 2024 Top Directors Awards Conference to the dual themes of financial advisor recruitment and advisor retention. Why? Because the difficulty in growing advisor headcount is the number one factor restricting investment services growth in banks and credit unions. Conversely, growing the advisor force is the most surefire way of growing revenue, capturing assets, and increasing market share.
Kehrer Group’s proprietary data demonstrate that the number of advisors working in banks and credit unions has remained stuck for the past decade–the result of a tight recruitment market for established advisors, a dearth of young people entering the industry, and firms losing too many advisors out the back door.
But the most recent run of our quarterly Influencers Poll provides reason to hope. Two-thirds of Influencers from banks and credit unions reported net gains to advisor headcount through the first three quarters of 2024. Digging deeper, it appears that banks and credit unions are sourcing new advisors from within the institution, as well as from other banks and credit unions. Of the 10 influencers from banks and credit unions that reported adding advisors this year, 8 hired advisors from another bank or credit union, and 6 hired advisors from within their own institution.
Of course, regretted attrition is eating into those recruitment gains. Of the 4 influencers from banks and credit unions that reported losing advisors this year, 3 lost advisors who were recruited away by another firm. And 5 of 13 influencers from TPMs, vendors, and consultants say their partners or clients have lost advisors to outside recruiters during 2024.
At the Top Directors Conference, comments from the bank and credit union participants confirmed a growing emphasis on developing talent internally. During a panel discussion with winners representing each of the seven award categories, panelists shared having success recruiting from colleges that offer a financial planning major and from among the institution’s licensed branch staff, and developing them in an associate advisor role, often partnered with a senior advisor.
The Top Directors are also focused on retaining their best advisors. Some of the strategies shared at the conference focused on enticing long-tenured advisors to stay with the firm through enhanced payouts, lifestyle improvements, and the opportunity to monetize their book of business without going to another firm. Other strategies focused on restricting the ability of departing advisors to take clients and assets with them. “One public execution,” commented one panelist, “can save you a lot of lawsuits.”