Industry Recruiters Respond to Wirehouses Dropping Advisor Headcounts

Industry recruiters are breathing a sigh of relief as major wirehouses are no longer reporting advisor headcounts. With firms like Merrill Lynch, Morgan Stanley, and Wells Fargo deciding to keep this information under wraps, recruiters are finding that the numbers may not have been as significant as once thought.

According to Phil Waxelbaum, founder of Masada Consulting, the difference in revenue generation between seasoned advisors and newcomers to wealth management has become much smaller in recent years. This shift has made headcounts less meaningful, as adding more advisors doesn’t necessarily increase the average revenue per advisor.

Bank of America’s Merrill Lynch recently joined the ranks of firms no longer reporting headcounts, following in the footsteps of Morgan Stanley and Wells Fargo. Former Morgan Stanley CEO James Gorman noted that the industry now has a multitude of metrics to track, making headcounts less relevant.

Industry innovations, such as technological advancements, have also played a role in diminishing the importance of headcounts. With technology allowing advisors to handle more accounts, the need for a large number of advisors has decreased.

Louis Diamond, an industry recruiter, believes that firms may be avoiding reporting headcounts due to shrinking numbers and a desire to avoid embarrassment. He notes that the figures don’t always reflect the expertise and assets under management of new recruits compared to departing teams.

Overall, industry experts like Bill Willis and Suryansh Sharma agree that revenue and expenses are more important indicators of a firm’s success than headcounts. As more firms follow suit and stop reporting headcounts, the focus is shifting towards more meaningful metrics in the wealth management industry.