Financial advisors have a wide breadth of choices when it comes to where they work. Some choose to work for large companies that may house up to 500 other advisors in one location, while others choose to go the boutique route. Boutique financial advisory companies may have a dozen or so employees.

A recent study by Bridgemark Strategies showed that financial advisors chose to work with either smaller firms or small groups within large firms. Reasons cited included shared values and additional support provided to those who chose to align themselves with smaller companies or groups in larger firms.

What Are the Advantages of Working for Larger Financial Advisory Firms?

The benefits of working for larger firms are largely related to branding and marketing support including firm name recognition, training and education, and access to products. These advantages are outlined below:

Marketing and Brand Name Recognition

Financial advisors who work for large financial conglomerates often receive marketing support free of charge. This support can include business cards, letterhead stationery, and office space.

Alongside the free materials to market their name, financial advisors benefit from the name of their company, which is often household-recognized. This recognition can help them to secure clients.

Education and Training

Large companies with a significant number of assets are able to support the training and educational needs of their employees. They often offer to pay for certification fees, such as when employees are studying for the CFP, CFA, or CIMA for example.

Depending on the products that the advisor is expected to sell, there may be sales and product training. This training assists the advisor with understanding how certain products may benefit their clients.

Access to New Products

Those who work for larger financial advisory firms may also benefit from access to new products, money managers or even integrated banking solutions. These products are generally not available at smaller firms. This access can allow financial advisors who work in larger firms to provide these solutions to their clientele.

The Disadvantages of Larger Firms

Despite the support and other benefits provided to financial advisors who work for a larger firm, there are some disadvantages:

Must Meet Quotas

In many cases, financial advisors who work for large firms are tasked with meeting specific quotas for specific financial products. If they fail to meet these quotas, they will likely be given a reduced payout. This system can be a significant drawback, as they must always be pushing certain products to their clients.

Reduced Capacity for Earning

All of the training and additional support that financial advisors receive from large companies comes at a price.

Those who choose to work at large companies often don’t earn as much money as their counterparts at smaller firms. This disparity leads to an ongoing cycle of pushing for new clients while often sacrificing better customer service and personal attention.

Why Are Advisors Choosing Smaller Firms?

Frequently, financial advisors — especially those who have experience — choose to move to smaller firms. Important reasons to choose to work for a smaller financial advisory firm include:

More Autonomy

Many financial advisors who work for smaller firms appreciate the autonomy they have. They may be able to offer services that they wouldn’t at larger firms, such as the preparation of tax returns or alternative investments. They are also able to give their clients more attention since they won’t need to meet sales quotas on products.

Increased Compensation

Those who work for smaller firms or own their own companies often benefit from increased compensation.

The larger number of services they are able to offer, combined with fewer requirements to meet quotas, gives them greater flexibility. They are often able to increase their compensation by obtaining a greater commission percentage.

Find Likeminded Professionals

Despite the benefits of working for larger firms, financial advisors often seek out groups of like-minded colleagues when selecting where they work.

Affiliation with smaller firms is driven by a desire for collective camaraderie, shared ideas. While advisors appreciate the support of a larger firm, they also fear being lost in the crowd. Aligning with a smaller group can also offer scale and help advisors assimilate into the new firm easier. They value finding other advisors that share the same values and finding likeminded professionals provides significant value to advisors.

Work with Bridgemark Strategies

Bridgemark Strategies is a leading M&A, recruiting and consulting firm.  We help advisors evaluate, assess, and negotiate the search for a broker dealer, RIA, and strategic partners.  Our team makes it easy for advisors to find their next firm. Reach out to us today at (866)266-8823 or on the web through our contact form to set up a confidential discussion and find out more about our services.