If you’re considering taking a one-time payout, don’t put it
off. Its value will decline as rates rise.
Having more than 25 years of experience, Procyon Partners’ Co-Founder, Phil Fiore, has extensive experience and expertise in the investment advisory space. In addition to being a co-founder of Procyon in 2017, Phil formerly held the positions of Senior Vice President of Wealth Management at UBS, Senior Institutional Consultant, Senior Retirement Plan Consultant, and member of the Institutional Consulting Group and its Advisory Council. 401KWire twice named Phil one of the Nation’s 300 Most Influential Advisors in the Defined Contributions Arena, The Financial Times recognized him as one of their Top 400 Advisors in 2014, and Barron’s named him one of their Top 1,200 Financial Advisors in 2015.
Given all these accomplishments and experiences, Phil is equipped to speak with authority in the wealth management space, but, when Phil was younger, the term “wealth management” wasn’t even in his lexicon. Coming from a first generation immigrant Italian family, Phil spent most of his early life believing that soccer would be what his future held. His father, a traditional Italian man, created the PAL Soccer League in his hometown in Connecticut. While his father instilled within him a go-and-get-it-yourself attitude as opposed to handing him money (a rudimentary business skill), soccer was indeed what his heart was set on.
Nevertheless, professional soccer only existed in Europe at the time Phil graduated college, so he had to figure out a new path. At first, his intended path was law school, but sometimes life chooses for you what you’re meant to do. In his late 20s, he was presented with an opportunity to join a business he couldn’t refuse which led to him became the highly regarded leader and dealmaker he is today.
With the war for talent showing no signs of abating, recruiting has become a top priority for advisory firms. It’s by far “the biggest concern” RIAs say the face today with respect to talent, according to a survey in the 2022 Talent Management Study from San Francisco-based RIA consultancy DeVoe & Co.
Advisory firms currently have an average of three open positions, according to an Ameriprise survey.
Andrii Yalanskyi/Dreamstime
“We’re in a state of distress in this industry right now,” says the firm’s principal, David DeVoe. “Good people are hard to find.”
The most recent Charles Schwab RIA Benchmarking Study concurs: “Talent is the top strategic priority for RIAs.”
Indeed, it’s been a perfect storm for financial advisory firms: a rapidly aging workforce, a lack of young advisors to take their place, a pandemic-induced Great Resignation, and massive competition from financial-service giants.
Over one-third of financial advisors are likely to retire within the next 10 years, according to a recent study by Cerulli Associates. Advisory firms currently have an average of three open positions, a survey by Ameriprise Financial reveals. Almost half of employees in the U.S. are looking for a new job or plan to soon, according to a new survey from executive search firm Willis Towers Watson . Fidelity Investments is aiming to make around 28,000 hires in the next two years, and Vanguard and Charles Schwab aren’t far behind.
“The market for advisor talent is as tough as I’ve seen it in 20 years,” says Caleb Brown, CEO of New Planner Recruiting. “Before the pandemic, about 30% to 40% of job candidates had multiple competing offers. Now it’s 100%.”
So how are RIAs recruiting?
New York-based Wealthstream Advisors has turned to colleges. Every year the firm surveys colleges with financial planning programs that also attract students from the East Coast, says Michael Kimmel, senior advisor in charge of recruiting. Wealthstream then decides which schools to visit and sends out descriptions of job openings and internships. When executives visit a campus, they attend financial planning classes, teach, and talk to students about the firm, the RIA business, and life in New York City. And they conduct interviews.
Back in the office, the Wealthstream advisors select the best candidates, ask them to write up a case study, and fly them to New York to make a presentation. After being interviewed by people in the firm, finalists are given what Kimmel calls “third-party assessments,” including a personality test and tests for numerical reasoning and critical thinking.
“We want to make sure we don’t miss anything,” Kimmel says. “You’re looking for the right balance between technical knowledge and soft skills.”
The process has worked well, says Wealthstream President Michael Goodman. “You have to be willing to commit to it and develop HR skills,” Goodman says, “but it’s been very rewarding, and we’ve seen hires like Katharine George make vital contributions to the firm.”
George, who graduated from Virginia Tech in 2017 and is now a senior advisor at Wealthstream, says she was impressed by Wealthstream’s rigorous interviewing process. “The process was very robotic and impersonal at other firms, where you just filled out some forms,” she says. “Wealthstream took the time to find out about me and explained their culture and what it was like to live in New York City. It felt like they were making an investment that benefitted both of us.”
By contrast, Procyon Partners in Shelton, Conn., uses LinkedIn to target experienced advisors who are interested in becoming equity partners.
Procyon takes notice of advisors who start to follow the firm on LinkedIn and read its posts, says Phil Fiore, partner and executive managing director at the RIA. “We then target the people we want to attract. If they respond, we tell them we’d love to have a conversation.”
After talking to candidates, Procyon sends the names of finalists to its outsourcing affiliate, Dynasty Financial Partners, which helps the firm screen for the best hire.
Advisors who do come on board “want to continue to grow and are looking for a path to partnership,” Fiore says. “They want to be part of something much larger than where they are.”
Even though offering equity is becoming increasingly popular in a hypercompetitive recruiting environment, DeVoe of DeVoe & Co. counsels against it.
“I caution firms to stop short, even though it’s tempting in this market,” DeVoe says. “I recommend that a new hire work for the firm at least one year before offering them equity. Equity is a big deal. A candidate may dazzle you in an interview, but if they don’t turn out to be the right fit, it becomes quite a hairball and difficult to untie that knot.”
Then there’s good old-fashioned cash compensation, which has hardly gone out of style as a recruiting tool.
In 2019, advisors making a lateral move usually received a 10% pay raise from a new employer, says Brown of New Planner Recruiting. Today, compensation increase for a lateral move “is unlikely to be anything less than 20% or 25%.”
Jason Fertitta, chief executive of Americana Partners in Houston, is blunt: Americana hires top advisors away from other RIAs, banks, and “big bulge-bracket firms” by offering them more money. “If you hire the best, you can pay them more,” Fertitta says. “It’s actually a smart move — one of them can do the work of two.”
To build a team of “Navy Seals,” Americana is willing to offer a generous incentive payout: 45% of the revenue the advisor brings in. Success at Americana is straightforward, says Fertitta, who was a former managing director at Morgan Stanley’s Private Wealth division: “Math dictates the path.”
But other RIAs, including DBR & Co. in Pittsburgh, say higher compensation is not the primary motivation for many advisors they recruit.
David Root, the firm’s founder and CEO, most recently used an executive search firm to hire an advisor who had worked in a local bank. “We matched her salary and gave her a bonus, but the advisor really wanted to be more entrepreneurial than she could be at a big bank,” says Root. “She wanted to be closer to the client and have an impact at the firm.”
Younger advisors, Root says, are also attracted to the firm’s philosophy of viewing itself as a “teaching hospital” where new hires are immediately immersed in all aspects of the business from meeting clients to participating in reviews and presenting quarterly reports.
“This approach mirrors what our large healthcare organization clients do,” Root explains, “and gives new hires a way to quickly ascertain what they’re getting into and what track they want to take.”
Other keys to attracting new recruits to RIAs include being able to show growth, having a diverse workforce and client base, outlining a career path, and making work-life balance a priority, industry executives say.
“You have to look at nonfinancial components of what it’s like to be an employee at the firm: recognition, well-being, career pathing, learning, and development,” Carol Benz chief people officer at RIA aggregator Cerity Partners said at DeVoe’s Elevate conference in Las Vegas this spring.
RIAs should have a recruiting checklist, New Planner Recruiting’s Brown says.
“They should have best-in-class technology, a new website, a team culture, client and team member diversity, and revenue and profitability growth,” he says. “And remember that job seekers want to know what they will learn at the job and how the opportunity will get them to where they want to go in their career and life.”
Some fun benefits wouldn’t hurt either.
“In this kind of market,” Brown adds, “we’re seeing firms offer Netflix subscriptions, Door Dash accounts, gym memberships, and massage therapy. Firms are being very creative.” And given the shortage of new talent, very determined.
“Built by FAs for FAs,” Procyon Partners can “fully understand the issues and stresses” that advisors experience, according to chief executive officer Phil Fiore.
FA-IQ reached out to advisors to ask: Has the feverish pace of RIA M&A activity made you consider either acquiring another firm or selling your own?
Phil Fiore, chief executive officer of Procyon Partners. Shelton, Connecticut-based Fiore has been in the industry for 27 years and has $5.5 billion in client assets.
“Since the inception of Procyon Partners, we have been very active in the M&A marketplace. Since launching our firm in 2017, we have successfully transacted on seven deals that are all currently part of the Procyon brand.
Although we are not looking to sell our firm, we are very active in the M&A space. It is our contention that scale truly matters as a firm looks to deliver differentiated services and resources to its clients, and the quickest way to gain that scale is through acquisition or merger.
Phil Fiore
We also believe that there is incredible FA and customer service talent out there in the wirehouses, regional firms or running their own firm for that matter, that for one reason or another feel unfulfilled and unable to reach their true potential.
At the larger firms it may be that these FAs or support team members are being managed to the least common denominator, which doesn’t allow them to truly build a customized service/investment model for their clients. While, on the other hand, those that run their own RIAs are forced to take valuable client-focused time and divert that time to working ‘in’ the business so the lights stay on, so to speak.
It is Procyon’s contention and belief that we can unleash our FAs from those impediments and allow them to truly spread their wings and chase their destiny the way they believe they can and should.
We believe we are uniquely qualified to do this for our FAs as we are a firm ‘built by FAs for FAs.’ We fully understand the issues and stresses that FAs deal with on a day-to-day basis and our job as leaders of Procyon is to allow our FAs to focus on the things that make them truly unique and fulfilled, which in turn results in a more successful Procyon. A win-win for everyone, as it should be.”
Institutional consulting is a specialty within the wealth management industry focused on advising corporate, foundation, endowment, and retirement plan clients. It’s a business area that’s often well-served by large firms such as Morgan Stanley’s Graystone Consulting, Merrill, or UBS—which typically have the advantage of a well-known name and a solid platform.
Yet much like private wealth, institutional clients have come to want more from their advisors—services beyond what might be offered by a brokerage firm.
Such was the case with Phil Fiore. He started building his practice at Prudential Securities in the 90s, moved to Merrill in 2005, then on to UBS in 2009. He and his team, FDG Institutional Consulting Group, built a strong business with more than $8B in institutional assets and $400mm in private client assets.
Yet it was in 2017 when Phil and his partners decided that working for a large firm limited their ability to grow and offer more to their clients. They had a desire to expand their footprint and their services—neither of which they could achieve at UBS.
So Phil and his team opted to make the leap to independence, launching Procyon Partners with Dynasty Financial Partners.
In this episode with Louis Diamond, Phil looks back over his journey and the first 5 years as an independent business owner, including:
Phil Fiore
The move from Merrill to UBS—and how that compared to their choice to ultimately opt for independence.
Transitioning the business—and what differences they realized in converting their institutional clients vs. their private wealth clients.
The unique requirements of institutional consulting—and what limitations prevented them from serving their clients optimally from within a wirehouse structure.
The breadth of opportunity they realized in independence—and how that fostered growth for their institutional business as well as their private wealth services.
Plus, Procyon’s extraordinary success in M&A—and how the firm has found a niche as a landing spot for RIAs looking to shed the day-to-day of running a business.
Often advisors, particularly those with primarily institutional clients, feel that they cannot better serve their clients in independence—and often feel stuck. But with an expanded independent ecosystem, advisors are now finding they can not only match the service they can give their clients but often improve upon it while expanding their business, as Phil and his team has.
It’s an eye-opening look at the real potential that exists—one with lessons for employee advisors and business owners alike.
March 2022 – RIA tv’s Jenna Dagenheart interviews Procyon CEO, Phil Fiore, who discusses the joining of Pivotal Planning Group with Procyon Partners in 2021.
Watch the replay below!