Investment Services Executives Discuss Ways To Improve Onboarding


The number of financial advisors working in banks and credit unions declined by 1.1% in 2016, even as the opportunity in investment services for financial institutions continues to grow, suggesting that the industry is ill-prepared to take advantage of the opportunity. That was one of the key findings shared at Kehrer Bielan’s semi-annual study group for executives who manage investment services businesses inside financial institutions, held May 2-3 in Chapel Hill, NC.

For the bank brokerage executives who participated in the study group, advisor recruitment and retention remain top concerns. Disruption stemming from the run-up to implementation of the Department of Labor’s fiduciary rule, coupled with intense competition for quality advisors from the wire house firms, put a squeeze on advisor headcount in 2016. Banks that own their broker dealers faired slightly better than banks and credit unions that work with third-party broker dealers, but growth was disappointing across the industry.


One way to grow headcount, according to Peter Bielan, principal of Kehrer Bielan, is to lengthen the timeline used to onboard new advisors.

“Most recruitment packages being used today are a financial exercise looking for a quick return on investment and last only one year,” explained Bielan. “And guess what happens after the package expires? Many advisors leave for another firm. So all that expense and all that work that went into training that new advisor is lost and the process starts over again.”

To be truly effective, onboarding packages should last two to three years, according to Bielan. “After three years with your firm, a new advisor will be contributing to revenue in a meaningful way, and is much more likely to stick with your firm because he or she has been set up for success.”

Look for future Kehrer Bielan research in your inbox soon on how effective onboarding strategies can improve advisor recruitment and retention.