- On September 18, 2017
The recruiting demand for both W-2 and 1099 structured tuck-in advisors is as strong as we have ever seen. The demographics of the aging advisor population and the growing inorganic growth strategy trend of practices of nearly all sizes hiring and acquiring, has created a competitive environment for recruiting tuck-in advisors.
There are literally thousands of advisors of all shapes and sizes looking to bring in another advisor into their practice. Not a day goes by without Advisorbox receiving a call from an advisor looking for a tuck-in advisor, typically targeting $200K to $500K in revenue.
While advisors at this level can certainly affiliate direct with a IBD or custodian, there are unique value propositions across the country for tuck-in advisors who would rather be tucked into another practice than flying solo.
Tuck-in Value Proposition Options
The tuck-in value proposition and personality match is different with each opportunity. Advisorbox literally has hundreds of advisors in our database offering numerous and varying value props to advisors who join them. When it comes to tuck-in options there are no cookie cutter deals, each one is negotiated separately providing tuck-ins with the ability to maximize the industry’s demand for their services.
Depending on the geographical area and timing, there are compelling value props available for would be tuck-in advisors and for currently tucked-in advisors looking for a better scenario to plug into. Here are some of the options we are seeing for tuck-ins:
- Successor – Senior advisors who want a future successor to groom, then either sell to outright, or sell gradually through partial client acquisitions or equity buyouts over time. About 70% of soon to be retiring advisors do not have a succession plan or successor in place. This opportunity is becoming more frequent as the aging advisor population is starting to plan their exit strategies.
- Warm leads – There are advisors whose marketing programs generate more leads than they can handle themselves and others who have grown large enough to need help in servicing existing clients.
- Acquisition clients – Tuck-in advisors can also benefit from the acquisition wave coming to the industry due to the aging advisor population. There are practice principals acquiring practices who take the top clients from an acquisition for themselves, but give their tuck-in advisors the rest of the clients to service.
- Growth incentives – There are a lot of creative incentives local advisors have come up with to compete for tuck-ins and to incentivize growth. We have seen a growing trend of advisors who will reward tuck-ins business development by matching every new client you bring in, with another client the advisor transfers to you to service and grow. Other advisors will match the assets you bring to their practice by carving off the equivalent AUM from their book and provide to the tuck-in to service.
- Coaching and development – There are a lot of top independent advisors who both excel and love to coach and develop advisors. This kind of coaching practice principal is ideal to tuck-in with if you are looking to grow, develop, and take your assets and revenues to the next level.
- Growth and business development support – There are practices who will support you with individualized marketing programs and participate in your client meetings to help close more deals. Some advisors are more hands on than others in helping you grow. For would be tuck-ins, growth is typically their most important goal. There are advisors sincerely committed to helping their tuck-ins grow and willing to invest the time and resources.
Considering tucking into another practice? Advisorbox will be pleased to share the current options in your area and introduce you to local advisors offering compelling tuck-in value propositions.
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