A veteran financial advisor who runs a successful independent practice that he started four years ago, wants to find effective ways to attract wirehouse and bank refugees like himself.

For advice, we turned to our panel of experts: Hellen Davis, president of Indaba Training Specialists, a management consulting and training firm in Treasure Island, Fla.; Philip Palaveev, president of Fusion Advisor Network, an Elmsford, NY-based network of advisors; and Chip Roame, managing principal of Tiburon Strategic Advisors, a Tiburon, Calif.-based market research and strategy consulting firm for financial institutions and investment managers.

THE SITUATION:

William Spiropoulos spent close to 30 years working as an advisor at big financial services firms. Finally, four years ago, after enduring multiple mergers and regime changes, he decided he'd had it. He wanted to go out on his own. He's built his RIA firm, CoreStates Capital Advisors, in Newtown, Pa., into a successful practice with $350 million in assets, three administrative employees and 11 advisors. But, now, he wants to grow even bigger, and to do so partly by attracting disillusioned wirehouse and bank reps. Only problem is, he's not sure how to go about it.

Spiropoulos entered the business in 1977 after completing community college, with no doubt about what he wanted to do. “I always liked the magic of Wall Street,” he says. He started with what was then Dean Witter in a training program; a few years later, he moved to what was then Shearson, opening up an office in the town where he still lives. He stayed there for about 20 years, but eventually got fed up with the surfeit of mergers, he says. Next, he went to Prudential Securities. But a few years after the firm was bought by Wachovia, he came to the conclusion that he'd had enough — not with the business, but with life at a big firm. It was time to go out on his own.

To that end, in 2006, Spiropoulos started his own firm, bringing two colleagues as employees with him. He had majority ownership, but they also were given small stakes in the company. Most of his old business was fee-based and he decided to make the new firm an RIA. He wasn't a signatory to the Protocol for Broker Recruiting at that point — he signed on later — so he had to scramble for accounts. But most of his former clients eventually made the switch to his firm.

When he first started the firm, Spiropoulos' number-one motivation was “to get out of Dodge,” he says, as he feared the merger wouldn't work out. But now he has ambitious plans to expand his business to $1 billion in assets. He figures he'll eventually need to make some acquisitions of other practices to accomplish that goal. But he's also been eyeing the potential for recruiting wirehouse and bank advisors looking to become independent. The time, he thinks, is right for such a strategy. Aside from anything else, he forecasts a bear market for another four to five years and thinks his firm has a successful model to offer advisors. For evidence, he points to his assets under management, which have doubled over the past four years, and revenues, which have tripled. He's shooting for advisors with $50 million to $70 million in assets, people who would have a hard time setting up shop on their own and, he hopes, wouldn't be attracted to roll-ups.

Compensation for advisors — relationship managers, as he calls them — includes a percentage of revenues. Usually that's 20 percent to 40 percent of revenues, but the exact amount depends on whether the firm assigned the client to advisors or the individuals got the business themselves. Three of his 11 relationship managers are now wirehouse refugees.

To reach this market, Spiropoulos has focused so far on two fronts. First, he started working with a public relations firm, hoping a blast of publicity will attract the attention of candidates. And he's tapped Schwab and Fidelity's recruiting operations, so they'll refer breakaway brokers to his firm. But he's not happy with the candidates he has seen so far. Specifically, he's had a hard time finding people who seem to jibe with the culture at his firm. He's interviewed several candidates recently who urged him to add a broker/dealer unit or wanted upfront money, both suggestions he feels indicated their lack of organizational appropriateness. “The riddle is how do you connect with these folks and then find people who will fit the firm,” he says.

THE ADVICE:

Hellen Davis

If he wants to reach the world of ex-wirehouse folks, or people who want to leave wirehouses, then he needs a new marketing campaign. First, he has to get into the world of blogging. That means developing expert status in the blog world, so people who are thinking about leaving wirehouses think of him as the go-to source. He needs to call it something that immediately broadcasts that message: Formerwirehouseadvisors.com, for example. He won't have time to do it himself. But he can hire someone to write the blog for him. And he won't have to pay a lot, most likely. If he runs one post a day, that person will probably spend 10 hours a week on it. He'll need to set up a system for supervising what the blogger does. But he doesn't have to write it himself.

Also, he needs to go to LinkedIn. There are tons of groups with people who want to do the next thing in their career. Ex-wirehouse, ex-banking people — they're all over the place. He needs to find and join those groups, and search them regularly, every day, if possible. And he should list on Monster.com. When advisors are thinking about making a move, they tend to go on Monster to see what's out there, how their resume stacks up, how much money they can expect to make. It's often one of the first places they look.

He also needs to step up his website. I would start a separate site dedicated to providing information to breakaway brokers, linked to his blog. He doesn't want to look like he's recruiting. He wants to make it appear to be simply a source for information, with a lot of white papers and so on. Make sure the white papers are searchable, also. He should make it into the first place advisors go to when they're thinking of going out on their own. If he does it right, he can own that space. He'll get so many resumes, he won't know what to do with them.

Philip Palaveev

I'm not really that surprised by the reaction he's been getting. He has to ask himself, why would someone be attracted to his model? If I'm getting 20 percent to 40 percent of revenues and I don't have any ownership in the business, it sounds a bit like a wirehouse. Certainly, he's built a successful and thriving practice that has grown quickly in a short period of time. However, people who want to become independent may look at this and think they simply don't have enough control over their own practice. What advisors who leave a wirehouse want is to have their own practice and be able to control it. He has to focus on what's unique about his model, what he provides that an advisor can't find anywhere else.

Before he starts to look for another advisor, then, he has to consider his value proposition. What is the compelling reason someone would want to go with him, rather than stay with a wirehouse? Then he can begin his search.

He has to remember he's not the only one recruiting these people. Unfortunately, the recruiting market is extremely competitive today. There are other independents like him. And he's competing with the wirehouses for talent, on top of that. He's competing with everybody and their brother.

As for where he's looking, many other organizations also are turning to Schwab and Fidelity for the same reason. That is, Schwab has a lot of clients, many of whom also are interested in recruiting. Again, it's a very competitive market.

Ultimately, he has the potential to be successful, as long as he's thought through his value proposition and the best way to convey it.

Chip Roame

He may have a financial model that's too narrow. Why not pay someone upfront money? Why not pay someone 60 percent? Why not provide a b/d option? In fact, I would suggest he consider that. Most brokers aren't 100 percent in fees. He could have a b/d, just not let his advisors sell anything more after they join the firm. I'm suggesting he be somewhat more flexible.

To find more advisors, his talking to Schwab and Fidelity is a great idea. But I think everybody's doing that. He has to realize that, just because he's working with their recruiting operation, it doesn't mean he's on their short list of people to send advisors to. There might be many other firms ahead of him.

In other words, while that's a smart move, he does need to do other things. For example, I also think he should address his website. He needs more information aimed at advisors and how to make the transition. And he has to present himself as one of a few options to choose from. I'm an option, he's saying. And here are some others, with the pros and cons of each. Then he should write a blog, or magazine or website articles about the experience of transitioning. Here's what I did; here's what I thought about. Some people are going to read that and say, “this is pretty hard; this guy already did it. Maybe I'm going to call him.” So, he can present himself as an expert and, at the same time, make it clear that going out on your own is complicated and might best be done by joining an existing firm. And he should advertise, getting out the word in the right places.

Another move is to attend conferences, especially cross-over conferences that attract both captive and independent guys. And he needs to find out who the big recruiters are for this, get on their radar screen. There's a lot he can do, in addition to what he's tried already.