Addressing Advisor Movement in the Wealth Management Industry

The wealth management industry, a cornerstone of financial services, faces increasing pressure as advisor attrition rates rise. In 2023, a 7.5% increase in advisor movement resulted in significant AUM loss, and the Federal Trade Commission’s (FTC) ban on non-compete agreements, set for September 2024, is likely to intensify this trend. These factors, coupled with evolving client expectations and a competitive recruitment market, make it more crucial than ever for firms to adopt innovative retention strategies.

Artificial intelligence (AI) has emerged as a powerful tool, enabling firms to predict advisor attrition with more than 90% accuracy up to three months in advance.

This white paper explores the key trends driving advisor movement, the multifaceted impacts on wealth management firms, and the strategic role AI plays in reducing attrition. By focusing on early warning signs like trading activity, account management, and advisor tenure, AI allows firms to intervene early and prevent attrition.