It is a question virtually every branch manager will one day face: What do you do when a top-tier producer decides it’s time to leave the branch and the firm?
Veteran supervisors say: Always be prepared, establish a solid game plan beforehand. Even better: Don’t be surprised. Learn the telltale signs that a valuable advisor is flirting with another firm. You’ll have a better chance of retaining someone if you can win them back on before they pull the trigger.
“Each year that a high-producing rep remains with you and your firm, his value goes up substantially,” says Andre Cappon, president of the CBM Group, a New York-based consulting firm specializing in the financial services industry. Obviously, BOMs ought to try to keep these reps as content as possible, he says.
The Problem Is You
When a rep leaves, it’s typically the result of one of two problems, Cappon says. First, he may be having trouble keeping up production. “But, any good branch manager is aware of that,” says Cappon. “He should devote extra time to help the rep surmount whatever hurdles may be standing in his way.”
More often, Cappon says, reps choose to depart because they are unhappy with their firm—or, more commonly—you, the branch manager. “This is something BOMs may not realize—or may simply not want to address,” he says. But, given the undesirable end result—which, worst case, can have a domino effect that leaves other reps wondering if the grass is greener somewhere else—an ounce of prevention may indeed be worth a pound of cure, he says.
There are usually always clues that a rep is planning to leave. “A smart BOM will be attuned to them instead of being completely surprised,” he says. “For example, if a broker is readily changing investment products, putting his clients into more liquid investments and/or isn’t adding to his assets under management, he may be planning to jump ship. Keep the lines of communication open to see if you can remedy the situation,” says Cappon.
In many cases, alas, you’ll find that you cannot. That was the recent experience of a wirehouse BOM in the Midwest (who asked not to be identified) after a group of high-level producers left his office.
“They were very unhappy with some fees, and human resource issues the firm put into place a couple of years. And they made their dissatisfaction quite clear,” he says. “I asked several regional presidents to talk with them, but the reps insisted if the firm didn’t bend its rules on these issues, they would leave. And, they did.”
It was hard not to take their departure personally, the BOM says. “But, their issues were something I had no control over and could not get around. Somehow, as a manager, you hope your personality will help your advisors overcome any problems they may have with the firm, but unfortunately, that’s not realistic.”
Forget about your feelings; a manager’s focus must quickly shift to keeping that broker’s clients, says Chip Roame, managing principal of Tiburon Strategic Advisors, a California-based market research and consulting firm also specializing in the financial services industry. “Immediately re-assign clients in a logical fashion to the reps who stand the best chance of keeping them,” he says. “Give these reps timelines in which to call these clients.”
Beware of your own prejudices, Cappon cautions. “Don’t assign them to the rep you like best, but rather to the rep whose investment philosophy seems closest to that of each individual client.”
Both Cappon and Roame say BOMs should call or send letters to these clients stressing such points as:
- The ex-broker was a good person who chose a different path.
- The firm is still stable, thriving and greatly values the client’s business.
- The branch has many great advisors to reassign them to; you, as the branch manager, will personally help them pick the right one.
There are also steps BOMs can take every day to minimize the devastation of a rep leaving, Cappon says. “BOMs should be continually preparing themselves for the possibility that any of their sizable producers were to one day leave. Make copies of the statements of your reps’ best clients and bring them home and monitor them. Then you’ll be able to see when things change uncharacteristically, and a red flag should go up.”
Build solid individual relationships with all of your reps, says Roame. “Don’t let one rep become too influential.”
Stuart Silverman, a legacy brokerage branch and regional manager who now heads Fusion Advisor Network—a New York-based independent “financial advisory network” designed to help brokers make the move to independence—stresses how important this is. “Just as a rep doesn’t want one or two clients accounting for most of his assets, you need balance in the office. If you’ve got a top-notch producer, go out and recruit some equally good ones. Success breeds success, and it’s easier to attract high producers when you already have them. And, if you have a good number, it won’t be as financially devastating should one decide to leave.”