What’s the current environment?
Over years, we’ve seen a lot of changes. But in the last six months, we’ve seen the most with all the consolidation in the wirehouses and other changes at the large banks. This has created opportunity, and a lot of folks see the golden-handcuffs and deferred-compensation days are gone. Payouts are being reduced on a regular basis. The lower-level producers aren’t wanted. That really creates an opportunity for us at Investors Capital, because our sweet spot for is the $150,000-$300,000 producers [in terms of yearly sales/commissions].
These are the producers who are having reduced payouts and are even being laid off. So they are looking for a firm to help them, take them on and help them growth their business and take that business to the next level. We have a coaching program that allows the reps to work on growth via prospecting and building their business at a time like this.
When it comes to consolidation at the wirehouses, recruiting senior wirehouse brokers still takes time. It doesn’t involve as many advisors nor is it as easy as you might think. It takes time for wirehouse or bank brokers to understand what it takes to run their own business and to then take that leap of faith.
The situation is still very competitive, with everyone still looking for the same type of broker. Yet, the days of the big upfront dollars are generally over, though some firms are still doing it. But we’re all mostly at the same level.
What factors are affecting today’s recruiting market?
The competitive landscape of the industry is a big factor.
As we all look for the same broker, what differentiates us is our value proposition and our message that we convey to the market, which is that we provide Ritz-Carlton type service to our brokers. We give them the independence to run their own business.
Taking the opportunity to go independent requires a leap of faith … so the recruiting team has to be able to provide that roadmap to success. We must show advisors how to move their business and how to start their own businesses.
We are positive, but it’s a longer sales process today as people chose not to move unless they have to.
How is this playing out for your firm?