A thousand digital office visits? How virtual recruiting efforts are paying off

In the spring, the coronavirus pandemic threatened to bring financial advisor recruiting, a core growth engine for many wealth management firms, to a screeching halt.

Nationwide lockdown measures in March cancelled the traditional routine for advisors looking to move: a VIP office tour, hands-on technology demonstrations, dinner at a nice restaurant and the all-important handshake. At the same time, advisors’ attention shifted to guiding client portfolios through historic market volatility.

Since then, recruiting activity has returned to pre-lockdown levels. For some firms, activity is even higher thanks to a slew of innovations forced upon the industry by the pandemic that may become permanent fixtures.

Wealth management firms are finding success despite many employees still working from home and observing social distance protocols that restrict in-person meetings, says JMP Securities senior research analyst Devin Ryan. In fact, new virtual recruiting processes have been so successful for some firms that it could forever change how business is done, Ryan says.

“Overall, parts of the home office visit historically done in person may be better to do virtually,” Ryan says. “Like everything else, technology is able to improve efficiencies and, in some cases, lower costs.”

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Tech demos, for example, are far more efficient online, Ryan says. Home office visits can be costly for both the recruiting firm and the prospective advisor, and virtual recruiting avoids related expenses like airfare and hotels.

It also allows for a bit more discretion than in-person meetings, which can be important for some advisors looking to leave their firm, Ryan says.

For Vanessa Oligino, TD Ameritrade Institutional director of business performance solutions, the anonymity allowed by online tools, such as TD’s new RIAConnect, can also reduce bias in the recruiting process and help firms tap into a more diverse talent pool.

“We think this is really a more objective way to go about recruiting,” Oligino says. By looking for talent online, firms can find, “More women and more people of color who may have been filtered out otherwise.

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Advisory firms would traditionally only hire people who could come into the office, believing teams needed to be physically close to collaborate and better serve clients, Oligino says. COVID-19 has proven that advisors can be effective when working from home, which could permanently devalue physical location when it comes to hiring, she says.

“At this point, you can hire anybody, anywhere … I don’t think [firms] will revert back,” Oligano says.

At Raymond James, virtual home office visits have allowed the firm to schedule 300 meetings with prospective advisors since March, says Scott Curtis, president of Raymond James’ Private Client Group. Before the pandemic, Raymond James would host 650 visits in an entire year.

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Technology can’t fully replicate and replace in-person meetings, but they can be more convenient, Curtis says.

“Rather than having to dedicate a day and a half for travel, the meetings and the travel back, we actually can now deliver the visits in smaller bites,” that fit into the advisor’s schedule, Curtis says. “In terms of flexibility … this is much less disruptive.”

That convenience, paired with some market stability restoring a sense of calm to clients, is giving advisors more time to think about moving their practice, says Manish Dave, senior vice president of advisor business development at Ameriprise Financial. Since moving to all-virtual recruiting in March, Ameriprise has hosted more than 1,000 advisors in digital open houses, six times as many as one year ago, Dave says.

Of course, moving to virtual recruiting hasn’t been all smooth sailing. Everyone has a different level of comfort with technology, Dave says, and there are still technology glitches and slow internet connections that can add friction to the process.

Also lost is some of the spontaneity of an in-person office visit — a chance encounter with an old colleague in the lunchroom, or a run-in with a senior executive getting coffee, Curtis says.

But overall the success of digital recruiting efforts mean some elements are likely permanent changes to the industry, Ryan says. Those that aren’t making the investment in digital home office visits and advisor onboarding are at risk of being left behind.

“Recruiting is the best return on investment for these companies and really is the core of driving organic growth,” he says. “Firms that have invested in the technology, have the resources and the scale platforms are benefitting and getting back to an environment that is closer to normal.”