Industry recruiters said advisors at independent broker/dealers are expecting more from their firms than they ever have before, especially when it comes to up-front money.
“Financial advisors are more greedy than ever,” said Jodie Papike, executive vice president of recruiting firm Cross-Search in Jamul, Calif.
During a session at the FSI OneVoice 2013 in San Diego, Calif., Papike said she recently spoke with a $100,000 producer, and the first thing he asked was how much up-front money he could get for moving. “That’s the reality.”
Ryan Shanks, CEO and founder of Finetooth Consulting, said there are reps that are less greedy, but their main concern is being at a firm that’s stable.
Jonathan Henschen, president of the recruitingfirm Henschen & Associates, disagreed, saying advisors will overlook a lot of things at a b/d for more up-front cash.
In addition to up-front money, reps also now expect higher payout and better services from their b/d, Papike said. It used to be that the broker/dealer would just need service to attract advisors, but that’s not enough anymore. To meet that need, many are offering enhanced payout, funding for advisors to buy a practice, equity in the firm, or funding to help grow their branch.
It’s not enough to just supervise and transact for the advisor, Henschen said. Many b/ds are expanding their resources to reps, including practice management support, marketing help and business development tools. Such b/d services, as well as product specialties, will set a firm apart, he said.
The panel also discussed the impact of FINRA’s proposal to require disclosure of advisors’ recruiting money. Henschen believes that firms that don't pay notes will love the proposal, while those who pay substantial notes will hate it. The firms offerings notes over 20 percent are the ones driving others to offer upfront money in order to compete.
For the wirehouses, it’s an easy way out for them, as they don’t want to have to offer those notes anymore to get reps to move, Papike said.
Shanks said the proposal will cause wirehouse advisors to leave because they don’t want to disclose their up-front pay, however, and the independents will benefit.