Skip navigation
survive-mural-coronavirus.jpg Rich Fury/Getty Images Entertainment/Getty Images

How ‘The Year Unlike Any Other’ Will Reshape Wealth Management in 2021

No one could have predicted what 2020 had in store for us, yet, many advisors had the best years of their careers. How is that possible?

As I write this at the beginning of December, I find myself wondering where this year has gone.

There are times when March (and all that the COVID-19 pandemic brought with it) seems like a lifetime ago—yet we’re reminded daily that quarantines, remote working and masks are still very much a part of our lives.

But the end of 2020 is in sight—unprecedented as it was. The year was bizarre, uncertain and hopeful all at once. 

And even more unprecedented is that through it all, most advisors report having the best years of their careers.

No one could have predicted what 2020 had in store for us, least of all me, even as I wrote my annual year-end predictions piece at this time last year.

At the end of 2019, I noted that “the intersection of three forces—changing advisor sentiment, reshaped client expectations and powerful retention efforts by the brokerage firms—laid the groundwork for a world where advisors have the upper hand.” 

And I wondered, at the time, if advisors would take it. That is, would they jump at the chance to regain control and shift the balance of power in their favor?

The answer is “yes.”

Advisors at all levels proved this year that they held all the cards and took control when they needed to most, to ensure their clients were cared for in the best way possible in the worst of times.

And ultimately, advisors unhappy with the status quo chose to move where they felt they and their clients would be better served.

In fact, according to a recent report by Cerulli Associates, despite the pandemic, persistent unemployment in other sectors and a rollercoaster market, advisor movement has been incredibly robust this year. After a dip at the end of the first quarter, the second quarter finished off strong, and year-end projections estimate that 9% of all advisors will change firms or models in 2020—representing the greatest amount of movement in the past decade.

And, the winners in the recruiting race have been all over the map. To be sure, the independent space has captured its share of top advisor talent, but so have the wirehouses, J.P. Morgan, RBC, Stifel, Rockefeller Capital Management and First Republic Wealth Management.

Still, many wonder why advisors would entertain a move during a pandemic. The reality is that work-from-home mandates gave advisors the time for self-reflection and the privacy to evaluate other options without interruption. Firms were successful in demonstrating their value propositions effectively—even without the ability to host advisors “in person” for home-office visits.

But it was even more than that. The new lens through which advisors viewed their business lives opened their eyes to the fact that they desire freedom of choice more than anything—including whether they go to their office, meet with clients, sell bank products and how they market themselves.

This experience enabled them to see the truth that many knew all along, yet were too busy with the day-to-day activities.

Perhaps most notable this year was the fact that the wirehouses aggressively got back in the recruiting game, working hard to make up for market share lost in the past five years. Merrill Lynch was the exception; the firm is instead focusing its recruiting efforts on next gen talent for its Accelerated Growth and Community Markets Program. Conversely, Morgan Stanley, UBS and Wells Fargo are all in.

Yet what’s driving movement most is that advisors have come to view their businesses as businesses, and as such, are looking to build robust enterprises that have real value at the end of the day.

And in response to this, the landscape has evolved right at their feet.

There are now more turnkey models that offer advisors the ability to be independent business owners, with varying degrees of ownership and support and plenty of capital options, including a host of investors, for those looking to monetize and de-risk a move.

And this new world of choice is good for both advisors and clients, paving the way to personalize the client experience and grow individual advisory businesses like never before.

So while 2020 brought with it an environment like never before, advisors proved their tenacity and rose to the challenge. “The year unlike any other” left in its wake a host of change—much of it positive—and the potential of a new world order for wealth management in 2021.

What will 2021 look like? In part 2 of this series, we’ll explore the top 10 trends we anticipate for 2021.

Mindy Diamond is President & CEO of Diamond Consultants in Morristown, N.J., a nationally recognized boutique search and consulting firm in the financial services industry

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.