Working as an advisor for one of the four remaining wirehouses still has its perks, but there are only so many seats at the table, and even those seated can see the bloom is coming off the rose.
As recently as the early 2000s, landing a job as a financial advisor (FA) with a major Wall Street wirehouse was high on the list among the nation’s finance grads. Getting hired by Bear Stearns, Morgan Stanley or Merrill Lynch provided instant prestige, access to best-in-class technology and the opportunity to build a lucrative and life-long business.
With the help of relatives and friends, good phone skills and persistence, an average FA could earn a six-figure salary after a few years on the job.
A decade after the global financial crisis, pressure to move up or move out has increased substantially at the four remaining wirehouse firms. Bear Stearns is long gone, and Merrill Lynch, Morgan Stanley, UBS and Wells Fargo are racing to adapt to technological, demographic and regulatory changes that are rapidly changing how Americans save, invest and manage their money. In an era of call-blockers, robo-savers and ETFs, dialing for dollars and picking stocks seem quaint practices from a distant era.
Working as an advisor for one of the four remaining wirehouses still has its perks for top performers, including rich expense accounts, commissions, bonuses, and maybe even stock options. But there are only so many seats at the table, and even those who are seated can see the bloom is off the rose.
The bloom is off the rose
The wirehouses lost the lucrative day-trading business with the emergence of discount brokers in the 1980s and 1990s and are having a hard time winning over the 30-somethings who graduated college in the midst and wake of a global financial crisis. Even though multiple factors contributed to the crisis, many millennials harbor a deep and abiding distrust of Wall Street.
Perhaps more importantly, they are digital natives, which means they are entirely comfortable conducting business via a robo-saver app, particularly when all the free financial advice they are consuming is telling them that stock pickers rarely outperform ETFs and other non-managed funds. Yet compliance departments forbid FAs from using social media, email blasts and other digital guerrilla tactics to market themselves even as new regulations place stricter limits on how often they can make cold calls.
Even top-producing FAs have little to no freedom to pick clients and are under tremendous pressure to push proprietary products that may not be in the best interest of their clients. In many cases, the only way for a new advisor to make it is to work their way onto a high producing team that already has substantial assets under management.
Thousands of FAs have left wirehouses and struck out on their own only to find they are facing the same challenges with less resources.
Finding a home
All these trends factored into the decision to open Wentworth Management Services LLC in March of 2016 as a special purpose vehicle to acquire and hold interests in broker dealers and RIAs. Our senior management team has worked as producers and revenue generators, administrators and compliance professionals. They saw where the market was going and created an open architecture platform to provide a best-in-class broker-dealer solution to advisors, investors, and the custodian community. We provide technical, compliance and other support and scale so you can focus on growing your business and serving your customers.
“Scale is the only way for any advisor or financial services firm to survive in the technological renaissance that is underway in the fin-tech industry,” said Ryan Morfin, CEO of Wentworth. “The digitalization of operational work-flows, the focus on high-end mobile user experiences, the automation of compliance frameworks are all trends becoming reality today.”
Here are just a few of the ways broker-dealers and RIA firms can benefit from partnering with Wentworth.
- Open platform – Our open architecture platform is designed for hybrid RIAs who want the flexibility to offer both fee-based fiduciary services and earn commissions.
- Product access – Our holdings include a broker-dealer firm, investment banking division, insurance company and a wholesale distribution division. This enables us to bring institutional quality asset managers into the retail capital markets and offer up innovative alternative investment products to the marketplace that may not be available to wire-house advisors.
- Capital – We are prepared to invest in flexible, multi-faceted strategic partnerships with owners whether they are looking to recapitalize a business, exit it or grow it through a strategic acquisition.
- Risk vigilance – We prioritize risk management, proactively moving to ensure compliance with new regulatory trends. We strive to foster open and transparent working relationship with regulators, partners and clients.
- Service culture – We believe in extending the same level of customer service to our internal customers as we do external customers via our value-added concierge
Wentworth Management Services LLC is actively seeking partnerships with independent broker-dealers and RIAs. To learn more contact us today.