Advisors on the Move: What Banks Must Do to Stay in the Game

Evidence shows that there is a wealth management shake-up taking place at banks, and it continues to gain momentum. Advisors are switching firms in record numbers, investor expectations are rising and independent firms, especially RIAs, are growing like never before.

So, what is going on and why?

Simply put, advisors want more, clients expect more and many banks are struggling to keep up. Is this unfolding scenario a good thing or a serious setback sending shockwaves across the industry? Despite all the challenges and skyrocketing expectations, is there a silver lining somewhere that could potentially result in better outcomes for all the parties involved and elevate the whole industry?

One thing is for sure. For banks and other traditional financial institutions that are determined to evolve, this shake-up is a huge opportunity to grow, improve, attract real talent and enhance client experiences.

Let’s go into the details.

There is More to Life Than Chasing Bigger Paychecks

Recent studies suggest that a surprising 1 in 10 advisors plans to switch firms in the near future. Is it mostly about money? Not necessarily. More and more advisors are “jumping ship” simply because they are frustrated with outdated technologies, lack of support and limited flexibility, among other things.

But what exactly are they looking for?

• Better technology that makes their day-to-day work easier
• Operational support during transitions (moving a book of business is no easy feat)
• More autonomy to serve clients the way they want. No one wants to be micromanaged, and having more control over the way they do business can influence the happiness factor at work.
• Growth opportunities, including acquiring practices from retiring advisors

This new shift is putting many traditional institutions—banks in particular—at a disadvantage and is impeding their growth.

Why Banks and Credit Unions Are Losing Ground

Now let’s take a quick look at the statistical data provided by Cerulli. Even though banks and credit unions employ around 9% of all financial advisors, they only manage about 6% of client assets. Meanwhile, bigger firms such as wirehouses manage over 30% of U.S. assets with only 15% of the advisors. So what’s the difference?

In a word, it’s productivity.

Sadly, advisors who work at banks tend to be less productive. It’s not a matter of capability, talent, or dedication. What they need is access to up-to-date tools, much-needed resources and strong support to perform at full capacity and maximize value for their clients and employers alike. The problem is, many banks are not sufficiently equipped to handle modern wealth management tools, and that’s something that needs to be rectified.

Here are some of the biggest issues to keep in mind:

• Stagnant advisor growth—not enough hiring or support
• Lack of depth in financial planning and portfolio strategy
• Weak infrastructure for high-net-worth and tax-savvy clients
• No clear-cut succession plans, even though many advisors are nearing retirement

And when banks do manage to attract good talent? They may struggle to retain it. Why? Because advisors quickly realize they can’t serve clients the way they want to.

Today’s Clients Want More Than Just Investment Advice

When it comes to trust and estate planning, it’s not just about advisors, their knowledge and technical skills. It’s also about the evolution of a client.

What it means is that today’s investors are so much more knowledgeable, informed and demanding than ever before. They don’t just want someone to manage their portfolio—they want a well-rounded advisor who can help them reduce their tax bill, plan for retirement, handle estate issues, and give them a strategy tailored to their specific goals, among other things. The bar is higher now and expectations continue to rise.

In fact, research findings indicate that 69% of retail investors say tax planning is important to them. And for wealthy clients with $2 million or more, tax optimization is one of their top priorities—right up there with generating consistent returns.

Yet, fewer than half of advisor practices actually offer tax planning. That’s a big disconnect—and a big opportunity for traditional firms willing to lean in and capitalize on that.

The Rise and Allure of the RIA

As all this change unfolds, one part of the market is booming: RIAs and RIA consolidators.

These independent firms are growing fast thanks to two things:

1. Mergers and acquisitions—many RIAs are buying up practices, often from retiring advisors
2. Centralized, tech-driven infrastructure—which makes it easier for advisors to scale, transition, and serve clients better

For firms that can offer strong tech, centralized portfolio management, tax-aware investing, and help with transitions, the value proposition is hard to beat. That’s why more advisors are choosing independence—even though switching isn’t easy.

What Banks Could Do to Stay Competitive

If banks and traditional firms want to stop the talent drain—and compete effectively—they need to make changes. It starts with recognizing that advisors aren’t just employees. They’re entrepreneurs. Partners. Growth drivers. In other words, they should be perceived differently and appreciated more which may impact their performance and client service.

Here’s what banks should focus on:

• Invest in modern, user-friendly technologies to support smooth onboarding, client service, and compliance
• Offer advanced training and up-to-date tools for more thorough planning—especially tax and estate planning
• Centralize portfolio management to boost advisor productivity and consistency
• Create flexible, attractive succession options for aging advisors
• Give advisors more autonomy and better compensation structures to match what RIAs can offer
• Make sure all departments work cohesively as a team which we stressed in one of our previous articles.

Final Thoughts: Evolve or Be Left Behind

The message from both advisors and clients is loud and clear: they want more, expect more and deserve more—and they’re willing to move to get it.

Banks and firms that ignore this trend risk becoming irrelevant in the new rapidly evolving scenario. But for those who are willing to modernize, invest in advisor support, and meet and exceed client expectations, there are so many opportunities to step up the game and lead with confidence.

FREQUENTLY ASKED QUESTIONS

1. What’s driving advisors to explore new opportunities outside of traditional banks? Many advisors are looking for new opportunities where they have access to modern tools, more flexibility, and greater autonomy in serving their clients. In other words, they seek the best platform to grow their practice and deliver even more value.

2. How are client expectations evolving in today’s wealth management landscape?
Clients today are more informed and involved in their financial decisions than ever before. They are looking for comprehensive guidance and integrated approach that goes beyond traditional investing. That includes tax strategies, estate planning, and personalized financial advice. There’s has been a significant industry shift that reflects higher standards, demands and expectations.

3. What steps can banks take to stay competitive in this changing environment?
Banks have a real opportunity to lead by investing in technology, enhancing advisor support, and building infrastructure tailored to today’s complex financial needs. By recognizing advisors as strategic partners and providing the crucial tools they need, banks can not only retain talent but also attract new clients looking for thorough end-to-end guidance and cohesive well-coordinated teams.