BACK OFFICE HEROES: Why Technology Matters When Advisors Switch Firms


There are an awful lot of advisors in motion in 2023, and it’s not just the usual movement of maturing advisors from the giant wirehouse talent incubators to the relative freedoms of the independent space—now more than ever, advisors are open to switching firms.

Yet, at the same time, we’re told that the industry continues to consolidate and that financial advisor headcount is on its way down, said Richard Thoeny, executive vice president of PreciseFP product strategy at Docupace, a back-office automation platform for the wealth management industry, which makes a firm’s ability to recruit and retain advisors more important than ever.

“It’s still a huge decision,” said Thoeny. “Moving from one firm to another is one of the biggest decisions an advisor will make, at whatever level, The obstacle of going through that transition and all of the pain points: the potential negative impact to their clients, the down time during the transition, the impacts to their book of business to the growth strategy of wherever they end up going, there are just so many obstacles to moving. There has to be a very compelling reason to move to another firm.”

When advisors weigh all of the factors for and against moving firms, the fear of making a move is often enough to outweigh any potential financial benefits from changing.

Today, technology firmly lies among those compelling reasons to move, said Thoeny, as both a positive and negative factor, but so does a firm’s branding.

“I think that a firm’s environment comes first of all from their branding, so they have to have a brand that speaks to the advisor, and then they need all of the things that come along with that brand,” said Thoeny. “It’s no longer good enough just to pay advisors more money, there are other components that come into play, and one of them is that advisors want to go somewhere where they want to be part of the provider’s brand—it’s an extension of them.”

A firm with a culture of giving back and engaging in pro-bono work, for example, is more attractive to advisors looking to change firms than one with no such tradition, said Thoeny, especially those who are philanthropically inclined. A firm with strong foundations in diversity, equity and inclusion are not only more likely to attract diverse job candidates and clients, but also diversity-minded professionals.

Other important elements, like career development, coaching and succession planning follow, said Thoeny. Of particular importance is flexibility in terms of business model and design.

“It’s what a firm brings to the table, and the underlying component to the success of everything that firm is going to deliver is technology,” said Thoeny. “Culture and these other things come into play, but a lot of that sits on top of a foundation of technology: That truly makes a difference in the decision-making for advisors.”

Why Tech Is Key

Technology intersects recruiting and retention at several points, said Thoeny, the most important being that technology is usually responsible for an advisor’s first impression with their firm, as firms are using technology to recruit advisors.

“Once I decide that I want to go and actually move firms, a firm’s technology tells me what that experience is going to be like, because it’s a huge process to go through to take an advisor from one firm to another,” he said. “If a firm can show that they’re going to do it with really cool technology, that they’re going to interact in a very efficient and resourceful manner, it makes a difference.”

A smooth, tech-driven transition signals to the advisor that their experience with the firm should also be smooth and easy. Any technological hangups during the transition serve as a warning sign to the advisor.

A firm also needs to be able to demonstrate to an advisor that their transition is going to be easy and quick to minimize attrition of clients or assets.

“If firms are forward-thinking, it’s a huge differentiator,” said Thoeny. “They need to show ‘here’s how we’re going to use technology to reach out to your end investors, here’s how we’re going to repaper, here’s where we’re going to get the data we need to get, and here’s how you can move your book of business as quickly as possible.”

The PreciseFP solution  from Docupace is designed to enable seamless advisor transitions for firms engaging in mergers and acquisitions, said Thoeny, offering them another valuable chip in the competition for advisor talent.

Technology for Retention

Then, after the advisor is enticed to a new firm, technology’s role in retention should become clear, said Thoeny.

While culture, career development, leadership and regulatory issues all play roles in advisor retention, technology is not only itself a factor in the choice to stay at or leave a firm, it touches all of these other issues as well.

“It all goes back to if you have a technology stack that is very capable and that makes the advisor’s life easier,” said Thoeny. “At the end of the day, they want to be working with their clients, so anything you can do to offload the administrative burden on them and free up time for them to spend with their clients is a plus.”

Of course, compliance and cybersecurity concerns also play into recruiting and retention, said Thoeny. For example, bad headlines or industry attention from compliance shortcomings or cybersecurity breaches can damage a firm’s brand and its standing among potential recruits and clients.

On the other hand, being able to offer compliant and secure technology to advisors makes a firm more attractive to prospective talent.

“Today it’s critically important that things are done in a cybersecure way,” said Thoeny. “You don’t want to be doing business in email, or writing things down on paper. You want to demonstrate that your technology supports a cybersecure environment that can control not only the data coming from clients and advisors, but all of the documents involved in those relationships as well. It just takes one data breach and you’re fighting to recover for years.”

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