Bluerating | January 2022

2021 was a record year for networks of financial advisors. Currently, financial networks are taking on the new challenges of 2022, a year that still appears illegible.

The industry of financial consultancy is growing stronger. The market is in the hands of a dozen financial networks: six of them own over three quarters of the assets under management and the others follow; after them, there is a void.

There are three possible ways to grow rapidly and in a meaningful way.

The first is M&A, that is merging and acquiring new networks.

This is seemingly the most convenient option. Last year’s success means that there is no shortage of funds. However, the most challenging aspect is finding the right company to acquire and integrate rapidly and effectively in order to avoid the loss of good financial advisors for both the acquiring and the acquired networks.

The second option is betting on the recruitment of financial advisors from other financial networks.

However, this is often a zero-sum game for the sector (it consists only in moving professionals, clients, and portfolios from one company to another).

Sometimes this results in a sum below zero: in fact, a campaign of acquisitions worthy of the football market (4-6% of the portfolio) can put a strain on financial sustainability.

The third option is to find newcomers outside of the usual barnyard: this means looking among the tens of thousands of bank employees ready to take the leap and become financial advisors.

This option has already been implemented by financial networks; however, it is allegedly the most complex strategy.

First of all, not every bank employee is ready to take the leap and become an advisor. However, the most courageous employees often hide the most interesting talents.

Moreover, the passage from bank employee to financial advisor does not guarantee success or the paycheck at the end of the month.

It is therefore fundamental to define the characteristics that future financial advisors should have, the most attractive profiles for financial networks, the preferred expertise, skills, and talents that the 2022 financial advisor should cultivate in order to enjoy more success on the market.

The characteristics that make a good professional out of a financial advisor can be divided into tangible or intangible.

Tangible characteristics amount to the track record measured quantitively (number of assisted clients, value and composition of the portfolio) and qualitatively (satisfaction, loyalty of clients).

Intangible characteristics lie in the Socratic method, or maieutics, which for ancient Greeks was the art of birthing babies. Socrates used this term to describe the art of extracting the truth from people through dialogue, empathetic listening and questioning.

This uncommon, if ancient quality should be accompanied by the ability to work in a team and master the digital world as well as ongoing professional updates.

How to identify the ideal candidate? Sometimes, looking for a fierce gaze in a person’s eyes can suffice.

Open season then on the best financial advisors in the jungle of financial professionals.

Nicola Ronchetti