Recruiting Roundtable: All Eyes on Super-OSJ and Hybrid RIA Groups for Q4 and Beyond Advisor Moves

Leaders Across Hybrid RIA and Super OSJ Groups Affiliated with Commonwealth, Cambridge and Advisor Group Discuss Q4 Recruiting Trends and What’s Ahead

The path may be unclear but just keep moving forward.

As the country has slowly and gradually emerged from the worst stages of the COVID pandemic, financial advisors are continuing to make moves – between firms, from one business model to another, into or out of the industry entirely. 

Against this backdrop, independent financial advisor groups – including hybrid RIA firms as well as Super-OSJ groups – remain as relevant as ever to the independent wealth management channel.

After all, each financial advisor transition involves some uncertainty on the part of the advisor making the move – How much personalized support will I get once I’ve made the transition?  How much help will I need in navigating my new firm’s services and solutions?

Being part of a hybrid RIA or Super-OSJ group can increase the comfort level for advisors who are moving to a different firm, especially with instances where the advisor is joining a large independent broker-dealer and corporate RIA, with thousands of affiliated financial professionals.

Given this context, the recruiting growth opportunities are considerable for hybrid RIAs and Super-OSJs that are able to anticipate the whys and wherefores of these transitions and make the strategic decisions and investments that will help these groups get the most out of advisors’ wanderlust and grow.

October’s Recruiting Roundtable Participants

That’s why for this month’s WSR Recruiting Roundtable, we bring together three leaders of independent, fast-growing firms that are either hybrid RIA or Super-OSJ entities.

And we’ve picked their brains about recruiting – Where it has been in recent months, where it is now and where it is going. 

It’s a changing landscape, and our Roundtable participants are right on the cutting edge:

This Month’s Recruiting Roundtable Question:  How do you see recruiting between now and the end of the year, and what are you doing to increase recruiting results and market share?  

Cammy Smith, CEO & President, Integrated Equity Management:

Cammy Smith, CEO, Integrated Equity Management

Year over year, we have seen an increase in advisors changing affiliation models and changing firms – especially to the independent space – RIAs, RIA service providers, IBD-RIAs and other “supported independence” models. 

The COVID-19 pandemic has forced advancement and creativity upon all of us, and it has also opened up space, curiosity and action for advisors even more than before: we see this trend continuing well into the mid- and long-term. 

In Q4 specifically, we anticipate that advisors will be wrapping the bow on their decisions to leave firms they aren’t a fit with, run towards a new approach and carry strong momentum to execute their transitions in the new year. 

What the pandemic has also done is to force each us to think, ‘what really matters?’ 

In our conversations with financial advisors, this has boiled down to a few key themes: 

  • I love life and my family, and I want more of this (and less of…that!)!
  • My life’s work and passion has been serving my clients. If I am thinking about succession, retirement, or exit, how will this play out if I don’t have the control over these decisions, don’t have flexibility, or cannot monetize my asset because I don’t own it?
  • Things have changed – I am concerned about Reg BI and I think I am paying way too much for the support I am receiving. What am I missing?

To advocate for advisors and their clients, “supported independence” is a great option to solve these challenges. To us at IEM, this means having all the benefits of independence without all of the headaches. 

Advisors can fully own their clients and practices, be on a team, operate in a nonproprietary environment, land softly and develop a plan for succession – all with optionality around their own unique life goals. 

“Supported Independence” is attractive to many captive and semi-captive advisors, and as such, many of the common players are becoming big-box. At IEM, we are seeing success in providing a boutique solution for advisors backed by credibility and scale. 

Champion Diversity – Make the mix work.

Advisors who affiliate with IEM get the benefits of the Commonwealth Financial Network – the largest privately owned IBD-RIA in the U.S. – as a foundation and have IEM overlay on the day-to-day mechanics. 

We’re at an inflection point in history and in our industry.  Financial advisors want to build something greater together, make a lasting impact, champion diversity and find a forward-looking independent solution rooted in traditional values.  Firms that can offer all of this to advisors will be successful.

Brian Heapps, President & CEO, GenXFinancial

Brian Heapps, President and CEO, GenXFinancial:

We have seen a steady increase in recruiting activity during 2021 as the country returns somewhat back to normal following the pandemic and the 2020 presidential election. 

Since launching GenXFinancial in 2018, we have continually focused our strategy two things:

  • First, to help next-generation advisors grow through acquisition opportunities we help source through our SellMyFinancialPractice business.
  • And second, to help those advisors in need of an exit strategy to maximize and immediately protect the value of their businesses. 

Innovative Financial Group (IFG), SellMyFinancialPractice and MyRemoteFA are all complementary subsidiaries of GenXFinancial that support our strategy with real meaningful value to the financial advisors who are considering joining our firm.

Through our IFG entity we currently support over 180 fiercely independent advisors doing business in all 50 states.

Super-OSJ and Hybrid RIA Groups – Always focus on the opportunities and possibilities.

In terms of our recruiting outlook, I’d say that financial advisors are now even more interested and motivated in learning about opportunities for growth and succession, and their clients have become somewhat accustomed to a remote relationship. 

As such, our recruiting pipeline has never been busier with high-quality advisors seeking the next level of independence.

Gregory S. Raines, CEO, TAG Advisors:

Gregory S. Raines, CEO, Tag Advisors

Overall, TAG’s results, like the industry, have lagged a little bit year to date. 

We are seeing a bit of COVID-related hesitancy in reps attempting to transition a practice while still not meeting clients directly. That said, we have had $6.4 million onboarded through September and have $4.1 million in “probables” or signed letters of intent in the pipeline. 

With that said, we still expect to have a three-year run rate averaging $10 million each year for the three years ending Dec. 31, 2021. 

Candidly, as the industry continues to consolidate and become increasingly institutionalized, Super-OSJs and enterprises are becoming more important in their connectivity, advocacy, influence and culture. 

In my opinion, Super OSJs are filling the void left by regional broker-dealers that have been swept up in the industry consolidation. 

This is the message that we are amplifying and emphasizing at TAG in our conversations with prospective advisors.  

Jeff Nash, CEO of BridgeMark Strategies, moderates WSR’s monthly Recruiting Roundtable.  He can be reached via info@wealthsolutionsreport.com

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