To grow a business, you have to add to your roster of talent, and the wealth management field is no exception. Though major wirehouses still nab and cultivate a great deal of talent, independent firms and bank competitors around Boston are offering their own reasons to lure away talented financial advisors.

Take, for instance, Baystate Financial, which has added 41 advisors over the past 18 months, said Dave Porter, managing partner and owner. Porter said Baystate Financial lost just seven advisors over that same period, and it employs a total of 303.

“We use something called the billable hour concept,” and the firm focuses on providing support staff to its financial planners so they can spend more face time with clients and prospects, he said.
“That’s been a huge attraction. We’ve picked up a number of financial advisors, some of them earning more than $1 million, because they don’t have an ability to grow their business further and they just can’t get out to see new clients,” Porter said.

Or consider Woburn-headquartered Pinnacle Private Wealth, which is building out its franchise with new offices in Leominster and Needham. The firm presently employs 15 advisors, including a recent recruit from Fidelity, and is looking to steal away more talent as it expands.

“Advisors like to be affiliated with a reputable firm. We also go through LPL, but they want to be involved with a group that has energy, synergy… We have a fun environment. It’s a positive environment, conducive to doing business,” said Managing Partner Myles Dudley.

Dudley said Pinnacle’s platform also tries to appeal to advisors who’ve built up their experience and book of business and now want to strike out on their own.

“We offer a turnkey approach” so Pinnacle’s advisors are provided with the equipment and office space they need and then more or less left to their own devices, he said. “They just come in and focus on their business, servicing their clients and growing their business. We bring all the resources to them and they’re able to plug and play.”

Or you might even consider the case of Rockland Trust, which has focused on building its investment management business as it increases its presence within the city of Boston. The bank has been growing those assets under management at a rate of approximately 14 percent per year, largely due to efforts to cross-sell investment management services through its branch network. It has added seven new staff members to its wealth management division since opening an office in Boston two years ago.

David Smith, Rockland Trust’s chief investment officer, said that banks entering the wealth management business face unique challenges attracting talent in this space, largely because talented investment managers don’t come cheaply.

Quality Over Quantity
Smith said his ideal candidate would have institutional investment background, of course, but also experience working with individuals, as he estimates that 80 percent of Rockland Trust’s investment management business is affluent and high net-worth individuals.

“If we’re dealing with somebody who doesn’t have the individual experience, they very likely won’t be able to bring relationships to our firm,” he said. “So when we have a job positing, we tend to get inundated with people coming out of firms like SSGA, Fidelity, MFS ¬– people with really good investment acumen but who don’t have that individual experience. We are sort of challenged by having to expand their skill set once we bring them on board, if we hire somebody like that.”

Meanwhile, Baystate Financial actually has its own in-house recruiting team, brothers Matt and Ethan Smith. They told Banker & Tradesman that the wealth management industry as a whole has a problem keeping talent on board in the long run.  Industry-wide retention rates hover around 10 percent, and they said that part of that has to do with the way very large brokerages recruit talent.

When you have to hit a certain recruiting goal every year, you are eventually going to wind up bringing on people who may not ultimately be a good, long-term fit for the business, they said.

On this, David Smith commented, “If you take what a broker does, there’s really three components to their job: they have to sell, they have to service the clients they do sell and then they have to figure out how they’re going to invest the money.”

“I think the challenge in that brokerage model is, it’s very, very difficult to find people who can do all three of those things well enough to sustain themselves financially,” he said.

Porter said it comes down to quality over quantity.

“Most organizations I know in town have put pressure on whoever is running the office with the idea that you have to recruit X number of people,” he said. “We don’t care if you recruit two people or 20 people, as long as it’s the right two people or 20 people.”