Avantax Wealth Management, the tax broker born from the acquisitions of HD Vest and 1st Global, said it recruited 85 advisors in the first quarter for its traditional independent broker/distributor and in-house RIA, Avantax Planning Partners, setting a record for assets recruited for the quarter at $529 million. That’s 56% of what the company did in 2021, and that’s up from 49 new hires representing nearly $290 million in new assets in the fourth quarter.
On a net basis, headcount was roughly flat, with the firm ending the first quarter at 3,409 total advisors, compared to 3,416 advisors at the end of the fourth quarter of 2021. The firm ended the first quarter of 2021 at 3,718 advisers.
Todd Mackay, president of Avantax, attributes the stable workforce to the change in the company’s recruiting strategy and the segments of advisors it seeks.
“Our goal is really to bring in older advisers who already have larger practices,” Mackay said. “So we’re focusing a lot more on the advisor production numbers than the net number.”
Ninety-two percent of advisor attrition in the first quarter was due to non-producers, those with gross production below $50,000, the company said in its quarterly results.
Mackay said the company’s legacy businesses, including HD Vest and 1st Global, had historically focused on recruiting newly licensed finance professionals – tax professionals, accountants and CPAs who have worked in wealth management before. And while this segment remains a priority, Avantax has expanded its recruitment strategy to also focus on three other segments: existing finance professionals who are also tax professionals or CPAs at other broker/dealers; finance professionals who are not tax specialists or CPAs but are looking for a strong alignment with tax planning to provide more comprehensive planning and grow their business faster; and medium and large accounting firms looking to expand into wealth management.
“It was a change from a lot of the recruiting focus of some of our older companies that really focused on one of those buckets, which is newly cleared people who were just coming in. in the business,” Mackay said. “And now, by expanding our scope and reach in all four areas, we are able to capture a larger portion of the market of tax-focused professionals or finance professionals who believe that alignment with tax professionals or CPAs will lead to more success in their business.”
Mackay says the company’s “hiring structures and incentives” haven’t changed. He says many advisers realize the growth opportunities involved in partnering with tax professionals.
“Our network of tax professionals with millions of tax clients provides the greatest opportunity in the market for businesses to grow and prospect new clients, and this is especially true with the recruits we see coming to us. who aren’t tax professionals today, but are in other businesses looking for ways to grow,” Mackay said. “They come to us and we’re able to align them immediately with some of our tax professionals who want to partner with them on the wealth management side, and all of a sudden they have thousands of leads that they can continue to grow their business. . It is a very effective tool for us.
The company recently hired Elvis Medica, former executive vice president and chief growth officer at Financial advocatesa large Supervisory Jurisdiction Office of LPL Financial, as Director of Business Development.
Last year, RIA and investor Ancora launched a public proxy battle with executives of Blucora, Avantax’s parent company, arguing that the company was mismanaging Avantax, resulting in a net loss of 100 advisers over the course of the year. previous year and more than 700 advisors in the past. five years. Ancora ultimately lost this battle.
Some former advisers who left Avantax have told WealthManagement.com that service levels suffered and fees increased after Blucora acquired and combined its broker/dealers.
Blucora faced another proxy battle earlier this year, when activist investor Engine Capital issued an open letter to Blucora shareholders, seeking three seats on the public company’s board. But in March, Engine Capital withdrew its candidate nomination for election to the Blucora Board of Directors.