Roger Gershman here again for a three minute drill and landscape update on our beloved industry. Seeing it from your eyes,
A really great week for Wall Street what Goldman Sachs announced layoffs. Well, the last bastion of profitability at the bank is the private wealth division. Very surprisingly, they’ve laid off several producers who are doing several million dollars in production, some 3 million with hundreds of millions of dollars of assets and cut them.
It’s an example of how firms are hunkering down and have a really hard time going forward. All firms big houses are starting to really cut back, you’re going to see hiring freezes of sales assistants, you’re going to see layoffs of analysts. And that doesn’t really Bode quite well for our future.
But worse is a diminishing sales force. How? Well, there’s always been a revolving door of advisers going from firm to firm. Well, now the these firms have to pay record prices for acquiring advisors. That’s fine. No big deal. Except for there’s a whole bevy of advisors who are actually retiring firms, once again, have to pay for that they’re paying two and a half times. If you just take those two metrics. It’s expensive. And but the biggest metric is the advisors who are leaving completely the warehouse space and going independent. And that’s approximately 50% of advisors who are going independent, or would ever consider moving, would go independent, and never another warehouse.
Where’s that leave houses today? Cutting cost, lowering Commission’s hiring freezes. And it’s not a great story. Do you take Bank of America, Merrill Lynch, and that story is really, really tough. They’ve made a conscious decision to go to a private banking model, where everything centralizes, including asset management, not encouraging for the advisors to make decisions and become more of asset gatherers rather than financial advisors. And so that’s a good example of what’s to come.
So you add to that a huge layer of compliance and added oversight, couldn’t the FTC is charge of looking at cell phones and excuses for firms to cut the fat fire? And if you don’t abide by company rules and regulations, just like they want? It’s an excuse for them to let people go. It’s not great. I wish you’re going to have a better story. But that’s today’s week updates on our beloved industry and landscape. Thank you for listening.