Why do we spend so much time and money on advisor tech? The obvious answer is that advisors literally cannot do their work without a platform of some kind. But if you read between the lines, you might conclude that wirehouses and other big institutions plow their resources into platforms that often trap advisors.
Here’s what I mean. When your kick-ass tech stack has a tight grasp on every part of your workflow, client interactions and data, wouldn’t you be reluctant to leave it? If it is almost impossible to pull the sum total of your work out of the platform, wouldn’t the thought of breaking away or joining another firm feel like a career-threatening catastrophe?
Wirehouses know they have a retention problem. This year, Wells Fargo joined its peers in refusing to publicly report broker headcount figures. They know the RIA channel has grown for years, and among all the other benefits of independence, RIAs have always led the advisor tech foot race. Meanwhile, the heavyweight brokerages have huge war chests of resources to deploy, and they may well see a chance to kill two birds with one stone, solving for advisor retention and catching up to the RIA channel’s tech lead.
It’s an effective strategy, because big institutions have the scale and cash to dictate terms. The swivel-chair problem tends to disappear really fast when advisor technology vendors go out of their way to build API connections because they want a wirehouse’s business. Wirehouses have the capital and people power to sculpt a seamless and indispensable user experience. But that experience can be weaponized by locking away an advisor’s data in formats that are impossible to move elsewhere.
This isn’t to suggest that modern, easy-to-use tech is bad. I’m not even saying that advisor retention is a bad thing, either. Smart businesses give their workers compelling reasons to stick with them, after all. And competition is healthy. But if advisor retention is the aim, there are real limits to using platforms as leverage against advisors. In my experience, everyone wins when the platforms put the advisor and client first, not the home office.
Build Trust With Your Platform, Not Captives
The most immediate issue with chaining data to a platform is this: the tools we use today may not meet tomorrow's requirements. Look at how rapidly our industry has professionalized over the last few years. As someone who builds tech platforms for RIAs, I look for ways to future-proof tech stacks. One of the best ways I have found to do that is to choose tools that allow for the portability of data. When the next big innovation disrupts us, I need to make it as easy as possible for advisors to drag and drop their data into whatever new tools are available.
Doesn’t that mean it’s easier for an advisor to pack up their data and jump ship? Frankly, yes. But it's not the platform that should be indispensable, it should be advisors’ client relationships and data. The question is not, "How do we keep our advisors?" but, "How do we enable our advisors to excel, irrespective of the platform?"
There have always been better ways to keep advisors aligned with your business than holding them hostage with restrictive platforms. Equity-sharing agreements, when executed right, embody this empowerment. They demonstrate a commitment to mutual success, allowing advisors to share in the growth and prosperity of the business. This approach is more than just retention, it's about fostering a partnership based on trust and shared ambition.
And for that matter, a “platform” should be more than just software. What kind of operational support can you offer your team? How willing are you to find ways to say yes when they want to lean hard into their unique niche and work culture? Advisors thrive when given the space and resources to operate as entrepreneurs. Emphasizing data portability within your tech strategy demonstrates your trust and puts them in a prime position to adapt to the next tech evolution.
Joe McQuaid is the Managing Director of Platform Solutions at Concurrent.