The challenge of recruiting qualified producers to any financial services organization, be it an insurance company, broker-dealer, wirehouse, IMO (independent marketing organization) or bank, may be at an all-time high. Yet, the basic fundamentals for success in recruiting and training remain the same.
The best recruits derive from referrals from satisfied and successful producers. If top producers are pleased with the value provided, they will happily recommend the firm to their peers. Financial services companies successfully can garner such referrals by being creative, marketing-oriented and committed to building the success of the advisor over the long term.
NASD NTM 05-50 Adds to Recruiting Challenge
When the National Association of Securities Dealers issued its Notice to Members 05-50 in August 2005, it changed the recruiting landscape across the industry. While the NTM 05-50 conveyed to member firms guidelines for the supervision of equity-indexed annuity (EIA) marketing and sales, it also signaled the beginning of a new era in which the NASD assumed de facto regulation of the EIA business.
As a result, broker-dealers now are assuming a new responsibility for supervising their registered representatives’ fixed annuity business and dealing with the challenges of training, marketing and supporting fixed product sales through their current systems. Plus, B-Ds aggressively are looking for reps who have clean compliance records and who have solid experience in selling EIAs. After all, these products are a new source of revenue and offer B-Ds another way of growing their business.
While B-Ds ramp up their recruiting of reps who are successful in the EIA business, they also need to implement the marketing, training and administrative infrastructure to build this business. Reps faced with redirecting their EIA (or other fixed annuity) business to their B-Ds also will be looking at the responses formulated by IMOs, the organizations which historically have provided valuable training, marketing programs and service on fixed products.
There will be pressure on the B-Ds to display competency in handling the pre-sale and post-sale service aspects of the EIA business, and there will be even greater pressure to offer the high-quality marketing programs typically provided by the IMOs. B-Ds that pass these tests will benefit in terms of top-line revenue growth, producer loyalty and strong recruiting results. Those firms unable to satisfy the expectations of producers run the risk of seeing some of their best talent recruited away.
Show Me the Money or the Marketing