Top Recruiters Describe Massive Deals and Valuation – “Never seen anything like this before…”
In a weekend conversation with two well-known national wealth management recruiters a few very specific themes emerged. As the markets have remained at all-time highs and even hitting new highs throughout 2021 the market for advisors and teams is absolutely white-hot.
We took some time to deconstruct details that are making different teams exceptionally marketable and why firms like Rockefeller, UBS, and Morgan Stanley are having enormous success.
Three themes emerged: client assets have ballooned, everyone is a free agent, and bonuses are sky high while hurdles are at historic lows.
1. Client assets have ballooned to historic levels. “Clients have seen asset prices go to levels that have never been seen before. Even conservative portfolios have doubled and tripled in the past five years. That makes advisor/client relationships nearly impenetrable and assets super easy to transition,” said one of the recruiters we spoke to this weekend.
2. Everyone is a free agent. “Just five years ago more than a third of all big teams and advisors were still locked into a financial crisis-era contract. Now, nobody is. With an aging advisor population that (in the UHNW space) averages 52 years of age, a recruiting deal couple with a retirement package is the ultimate liquidity event. Those numbers climb beyond 550% at UBS and Morgan Stanley. That’s why you’re seeing large and long-tenured teams move,” said a recruiter who’s been handling large teams for more than twenty years.
3. Recruiting bonuses are sky high, while deal hurdles are historically low. “The recruiting departments across the spectrum have figured it out… traditional teams from Merrill, UBS, Morgan Stanley; they transfer their assets and they do it fairly quickly. The need for complex hurdles for assets and revenue that adds stress to a transition has largely been removed. As an example, if you are a large Merrill team and choose UBS you have zero hurdles of any kind throughout the entirety of your deal as well as their retirement package. So 550% completely stress-free. That’s unprecedented in the history of recruiting, and if you look at the data so far this year, it’s why they are leading the industry in transitioning AUM.”
Both of the recruiters we spoke with are set to have historic years that will more than double their best all-time annual numbers; again a function of asset prices and advisor revenue at epic levels. With tens of billions in client assets changing hands the fields remain ripe for harvest and the second half of 2021 doesn’t show any signs of slowing.
One final quote from one of the recruiters we spoke to this weekend: “It’s so active in every front right now. I’m working weekends and nights… so active at the highest levels. It wouldn’t surprise me if the second half of 2021 is bigger than the first half, which is saying something.”
Yes, that would be epic indeed.