two businesspeople shaking hands in silhouette

Subtlety is a lost art for financial advisors. In many professions, managers spend time scrutinizing minute behaviour changes by staff — trying to figure out if there are warning signs they might be leaving for greener pastures.

Executives and branch managers, though, don’t need to spend any time wondering if advisors are unhappy, according to Kendra Thompson, a partner with Deloitte in Toronto who leads the national Future of Advice and Investment practice.

“It’s very rare to be completely blindsided by advisors,” she said. “There’s very few times that the regional [senior vice-president] or leaders within the front office won’t know that someone’s shopping around.”

That’s because advisors are extremely vocal and fiercely protective of their clients and what makes sense for their business, Thompson said.

“They’re very quick to complain or to escalate or use whatever channels at their means to get a resolution,” she said. “They tend to feel comfortable picking up the phone and making sure home office knows what’s working and what’s not working for them.”

The goal of this pressure isn’t necessarily to renegotiate compensation, Thompson said. Advisors know grids are set centrally and understand the deals they have. Rather, it’s about ensuring they can spend time on the things that matter to their clients and the bottom line.

Thompson sees opportunities at both ends of the career spectrum to boost retention: Young advisors who are struggling and older advisors who are prepping for retirement.

Rookie advisors are the ones most likely to leave, she said, for a variety of reasons. One big one is a lack of money — underperformers who are not getting help or aren’t making a living wage, she said.

“We see this a lot in mutual-fund-specific channels, where they start off on a salary and they move to commission only, but maybe don’t get the training and support they need,” said Thompson.

Those people will typically leap to another firm before leaving the industry completely if they don’t find their footing, she said. Another driver of turnover is people who view their roles as temporary.

“If you grow up as a bank teller, and you become a financial planner, many will view that role rightly or wrongly as a stepping stone to being a full-service advisor,” she said.

That short tenure can be frustrating for organizations that have invested heavily in young advisors only to watch them graduate quickly out of roles, Thompson said.

On the flip side, advisors approaching retirement might also be a flight risk. The folks who are five to seven years out often seek to monetize their books or find succession paths, she said, which some advisors find is easier to do by switching firms.

Reaching out to those advisors proactively and playing that role, with advice and help on succession planning, can ensure they retire from your firm, Thompson said.

John Cucchiella, president of Toronto-based SMEx Advisory, agreed that many advisors approaching retirement are looking for a “liquidity event” — especially if they have a larger book.

“They’ll say, ‘Look, I’ve got five years. Let me go find a new firm that I can hang my hat on, create something valuable for my clients and at the same time get paid to do it,’” Cucchiella said.

They will often bring members of their team with them and give them first right of refusal to buy the book when they leave, he said.

Switching firms is a hassle, he added, but when somebody is waving a big cheque in front of an advisor thinking about retirement, they’re going to take it.

Sloane Muldoon, senior vice-president of retail performance at Scotiabank, said there are three main reasons advisors leave. First is a lack of a strong connection, both with their team members and their leaders. Second, and this applies primarily to advisors who are struggling, is a lack of a strong development plan. Third, is a misalignment between their personal values and the goals of the organization.

“There have been cases where people do leave for more money and sometimes long to return because there is a misalignment or there isn’t the fostering of team engagement,” said Muldoon.

Estelle Champagne, senior manager, strategy and performance with National Bank Financial in Montreal, said the recipe to retain advisors is fairly straightforward — a strong work culture, the proper tools and money.

If management is worried about turnover, the best thing they can do is stay close to advisors, she said.

“We have management that’s in the field, that talks to advisors. We communicate,” she said. “The signs will come to management teams that are close to their advisors.”