Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Practice Management > Building Your Business

Don’t Play Hard to Get When Switching Firms, Says Recruiter

Your article was successfully shared with the contacts you provided.

For the past 30 years, the conventional wisdom has been that advisors who want the best recruiting deals should flaunt bigger offers they have from rival firms to encourage other suitors to raise their bids.

While in some cases this really makes sense — especially if an advisor is primarily motivated by the deal itself — many firms secretly scorn such soldiers of fortune. They know there’s always a bigger offer somewhere, and that advisors motivated by such packages rarely stay after their deals end.

In most cases, I’ve found that firms who feel loved do more for prospective advisors than many in the industry might think. As in life in general, when people feel understood and appreciated, they are more inclined to reciprocate by trying to please the other party.

Advisors who let prospective firms know they seem to be the best places for a growing practice can elicit powerful rewards. These firms are often supermotivated to do everything in their power to accommodate potential recruits with such an attitude.

This is particularly true of advisors who can succinctly outline why they feel so optimistic about their move. Everyone and every organization wants to be valued for their unique attributes.

This makes sense from the hiring firm’s standpoint for several reasons. Once the branch and regional managers believe an advisor truly wants to join a firm, it’s worth their time to focus on the needs of this advisor.

These individuals usually are talking to many prospective advisors at the same time. Like other salespeople, they focus on the prospects they are most likely to close. It’s the best use of their time.

Once they feel an advisor is highly motivated to sign on with their firm, they have more leverage to go to battle on the advisor’s behalf with senior management. They are even excited about fighting on behalf of an advisor who really wants to come on board.

On the other hand, it’s hard to make a compelling case to score something special for a recruit who just says he’ll take the biggest offer he can get. Also, firms want to hire advisors who are good fits and will do well after a move.

A successful hire raises a branch manager’s stature in the eyes of senior management and often means they will get a nice recruiting bonus, too. Branch managers will spare no effort to hire advisors who they see as a full of potential at their firm.

One team I worked with was committed to joining a major wirehouse with an expanded lending and alternatives platform for clients. However, the advisors were coming from a regional firm and were used to higher payouts.

Fortunately, both the advisors and the hiring firm were convinced that their business growth would accelerate at the new firm. The wirehouse then devised a strategy to pay more of their backend bonuses in cash and less in stock to essentially boost the team’s payout for the first few years.

In another case, an advisor felt that the culture of a boutique firm was more to his liking than that of a rival wirehouse offering a bigger deal. The advisor viewed the enhanced access to product specialists and the prestigious name as potential boons to his business.

He had a few scattered international accounts but had never really focused on this kind of business, so initially the firm refused his request to prospect in a particular European country. However, knowing that he really wanted to join and wasn’t just shopping around, they agreed to offer him special training in offshore business and to let him prospect in that country.

In other cases, I’ve seen firms really extend themselves and boost their offers to help advisors pay off their deals so that they can join their firms sooner rather than later.

After an advisor identifies the right firms for his practice, it’s best for him to be direct about his choice. Firms always work harder to accommodate the needs of advisors who really want to move to them. Showing them a little love can go a long way.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.