At the 2017 Broker-Dealers of the Year roundtable in Chicago, we asked the winners to tell us what they were hearing in recruiting meetings. What questions were they getting from prospects and what stories resonated most with them?
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Lon Dolber, American Portfolios Financial Services: They want to know if I’m going to sell the company. I can tell you that’s the first thing personally.
Ryan Diachok, Geneos Wealth Management: From a recruiting perspective for us, it’s really telling a story, giving a background of how we got to where we are today, and the commitment to remain independent is conversation No 1. The Holy Grail in our industry from an advisor perspective, especially a large advisor group, is they crave that smaller firm, boutique-style culture.
They want that, but they also now fear the consolidation side of it. They don’t want to disrupt their business any more than they have to.
Amy Webber, Cambridge Investment Research: Yeah, a very similar [conversation:] private ownership is certainly first. Then connected to that, for us, is the flexibility.
Most of the conversations are, “My current [firm] just announced they’re shutting down X, Y, Z. What are you doing about that?” Last year I would say 90% of the time it was one of those things that was driving the move. This year it’s a little different because most firms have already made their announcements.
I think for us, right after independence is, “Hey, I want to be able to do it my way. Are you going to start forcing something?”
John Burmeister, Lion Street Financial: That’s another differentiator for us. Our advisors are owners. They buy into our parent company. In order to be part of the broker-dealer, you have to be affiliated with an organization that’s already bought into the parent company.
We have that mentality when we roll out different technologies. When we put in a new system, which we’re in the midst of right now, they’ve already seen the new system. They’ve already vetted the different vendors, so we use them as sounding boards. They’re partners in our decisionmaking process.
Webber: Another question that comes up in recruiting, I’m sure it comes up for everybody, is growth. “How are you going to help me grow? What resources do you have to help me grow?”
Growth has somewhat stagnated. We know over the last couple of years, we’ve gone from the middle teens in our average, organic growth rate … to last year [being] somewhat flat, or the top advisors were up a few percent.
I called that last year “DOL fatigue.” They were so not sure of what was coming that they almost couldn’t figure out how to move forward.
Janet Levaux, Investment Advisor: Do you want to give me a little example or color on someone who recently joined your firm that you think is symbolic of an industry trend, or someone who’s less than happy and you think that’s more about broader trends?
Webber: We have multiple branches that are $30 million. Then you get this $5 million or $10 million brokerdealer and they haven’t grown for years. They can’t figure that out on their own. From a recruiting perspective, that’s been an interesting evolution.
We want to make sure, just like in any recruiting engagement, that they are a good fit. We are not [acquiring them]. They actually shut down the BD, file a Form BDW and join us as recruits.
We have found that those couple of offices that have joined us in that way have really hit the ground running and started growing again right away because they didn’t have the resources [to grow on their own].
Diachok: We’ve got a case study right now we’re going through. One of our top five advisors maintained his own RIA, close to $200 million in assets in his RIA. He is now dropping that. He started using our UMA platform that we overlaid under his RIA at first, just for the technology and the efficiency.
He really analyzed his business and stepped back and said, “I’m not sitting down with clients nearly as much as I want. I’m not out prospecting. I’m not growing my business anymore because I’m running this RIA.”
We’ve been able to solve all that for him, take all that off of his plate. He’s able to save significant amounts of overhead because [he no longer has] the people he’s had to have in place for maintaining and running that RIA. I think that’s indicative, too, of the shift we’ve been talking about all day in the perception that having your own RIA is easier.
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