This detailed article looks at the data, and talks to a mass of senior wealth industry figures – including executive search experts – on what the recruitment market is like for North America's wealth sector.

For wealth management firms looking to fill an advisory or executive position this year the facts are sobering, if not daunting.

The average age of a financial advisor is nearly 60 years old and over one-third of financial advisors are expected to retire within the next 10 years, according to a recent study by Cerulli Associates. 

Approximately 15 per cent of wirehouse advisors and 7 per cent of independent advisors are at risk of leaving their jobs in the next two years, the JD Power US Financial Advisor Satisfaction Study found. Right now, advisory firms have an average of three open positions, an Ameriprise Financial survey revealed.

“Demand for talent is the most intense I’ve ever seen,” said executive recruiter Mark Elzweig, whose career spans more than 30 years. “Even in a down market, nobody is pulling back on recruiting deals.”

In the previous decade, three or four advisory firms may have been vying for the services of a job candidate, according to recruiter Louis Diamond, president of Diamond Consultants. Today that number is often 20 or more, he said.

The labor market for experienced wealth managers is tight across the country, executive recruiters report, but particularly cutthroat in Florida, Texas and the Southwest. 

So how can advisory firms compete?

Some of the answers are obvious: they have to pay up, offer attractive benefits and, in many cases, equity or a clear pathway to becoming a stakeholder. Other factors have become increasingly important: work/life balance, flexible hours and hybrid work locations, job satisfaction within a nurturing corporate culture, a well-defined path for career advancement and a workplace that is diverse and inclusive.

Compensation as a starting point
Any conversation about talent and recruiting has to start with compensation, especially in a business that revolves around money. Wealth managers may think that they’re paying employees a lot, but a recent survey by Arizent found that 28 per cent of staffers cited low compensation as the primary reason why they left their jobs.

Base salaries for advisors at RIAs have jumped 15 per cent to 20 per cent over the past three years, wealth management executives told Family Wealth Report. Wirehouses are offering advisors upfront bonuses of 150 per cent to 175 per cent of their gross production, said Elzweig, provided they sign long-term employment contracts varying from seven to 10 years.

Family offices trying to fill new positions are experiencing “sticker shock,” said compensation consultant Trish Botoff. Nearly half of family offices surveyed by Botoff Consulting reported paying higher bonuses for executives last year and higher salary increases this year. And eight out of 10 family offices reported paying higher salary increases to staff in 2022.

Executives at nearly one quarter of single family offices surveyed by Botoff for the Morgan Stanley SFO Compensation Report received salary increases between 6 per cent and 10 per cent or more last year, while 61 per cent of staffers got raises between 3 per cent and 6 per cent in 2021.

The median total direct compensation for CEOs at all single family offices was $800,500, while chief executives at SFOs with more than $2.5 billion in assets pulled down a cool $2 million. Median total direct compensation was over $900,000 for chief investment officers at all single family offices; COOs received $416,000; portfolio managers received $360,000 and relationship managers $232,500.