Deciding on Indy or Wirehouse?
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[quote=Soon 2 B Gone]No, what I've said is that virtually nobody who is a star at a wirehouse will bother to leave.
There are lots of mediocre brokers who leave rather than get shoved, or who get shoved and go the independent route.
Like Jeff I too have seen a lot of people returning to wirehouses after flirting with the idea of being independent and realizing that it's a mirage.
You have said you have never lived or worked within sixty miles of a wirehouse. Does that mean you do not have a formal education?
[/quote]
Yes, I have a bachelor's degree from a state university, and yes, there was a wirehouse office in that city. Mea culpa. I wasn't looking for a job in this industry at that time as I was an accounting major. SINCE college, what I said is 100% true...I'm not a big city type person.
I don't believe anything you say about career migration...your views are as biased as anyone's. I'll bet when the objective numbers are in, more quality advisors are going from wirehouse to indy than vice versa. The only thing I'll give you is that the majority of quality brokers don't migrate either direction. If anything, they may change firms, but most probably stay in the same channel due to comfort and familiarity issues. Quite opposite of what you've said, I've met a lot of quality brokers who went wirehouse to indy and are doing very well for themselves, and again, I'm willing to bet that absolute quantity aside, more are coming my way than are going yours.
[quote=Indyone]
I don’t believe anything you say about career
migration…your views are as biased as anyone’s. I’ll bet when
the objective numbers are in, more quality advisors are going from
wirehouse to indy than vice versa. The only thing I’ll give you
is that the majority of quality brokers don’t migrate either
direction. If anything, they may change firms, but most probably
stay in the same channel due to comfort and familiarity issues.
Quite opposite of what you’ve said, I’ve met a lot of quality brokers
who went wirehouse to indy and are doing very well for themselves, and
again, I’m willing to bet that absolute quantity aside, more are
coming my way than are going yours.
I agree my views are biased, so are yours.
I am not saying, and I don’t think Jeff is either, that there are more
brokers fleeing the world of the independent to return to a wirehouse.
The reason is because most of the independents who were once at a wire
were going to wash out if they didn’t become an independent.
Remember, I spent more than twenty years reading, often writing,
reports about what was happening in my firm and in the industry.
I also know that managers in the independent channel are extremely
frustrated by the fact–as in FACT–that virtually everybody they
recruit is a cast off from a bank or a wirehouse.
I’ll bet that when the biggest hitters at LPL first joined LPL they
were about to fail at a wirehouse–they bought themselves more time and
capitalized on it in spades. Good for them–occasionally that is
exactly what is needed, more time.
I know that a major fault with the wirehouse model is the willingness
to cut somebody free who might be a “late bloomer,” but the approach
has worked well overall.
You are in the position of defending your decision, yet it was the only
decision you could make. That hardly makes you an impartial voice.
On the other hand I have no dog in this fight at all. I can tell
you that if you were not afraid to live in a town large enough to have
wirehouses that you would make more money and have the joy of belonging
to a team of guys and gals who are fighting a common battle.
Sole proprietorships are not all they’re cranked up to be. There
are a lot of guys and gals who would trade the abilty to show up at
"the office" in their pajamas for the enjoyment of having somebody
across the way come and tell you a joke or ask if you’ve got time to
run over to Subway and chat over lunch.
[quote=Soon 2 B Gone]I agree my views are biased, so are yours. At last we have a civil debate. Yes, my views are naturally biased, although I've said several times, that I don't fault anyone for choosing to stay at or go to a wirehouse...it's simply a different career path. (I stand by my signature line, though)
I am not saying, and I don't think Jeff is either, that there are more brokers fleeing the world of the independent to return to a wirehouse. The reason is because most of the independents who were once at a wire were going to wash out if they didn't become an independent. I won't argue that point...I simply don't have sufficient knowledge to say one way or the other.
Remember, I spent more than twenty years reading, often writing, reports about what was happening in my firm and in the industry.
I also know that managers in the independent channel are extremely frustrated by the fact--as in FACT--that virtually everybody they recruit is a cast off from a bank or a wirehouse. Well, I was far from a cast-off, but again, I don't have anything except the anecdotal evidence from discussions from my recruiter, who had some wirehouse recruits, but by far and away in his midwest territory, his bread and butter was Edward Jones veterans.
I'll bet that when the biggest hitters at LPL first joined LPL they were about to fail at a wirehouse--they bought themselves more time and capitalized on it in spades. Good for them--occasionally that is exactly what is needed, more time. That would surprise me, but again, I haven't taken time to conduct a study to determine if his were true. The million dollar producers I spoke to sure seemed to have it figured out and it's hard imagining that any of them were ever on the verge of failure, although I'll allow that I didn't ask that question.
I know that a major fault with the wirehouse model is the willingness to cut somebody free who might be a "late bloomer," but the approach has worked well overall. That certainly seems plausible as publicly-traded companies by focusing on earnings would not have the luxury of waiting out the late bloomers.
You are in the position of defending your decision, yet it was the only decision you could make. That hardly makes you an impartial voice. Well, although a wirehouse option wasn't available, I didn't make the only decision I could have made. I could have suffered through the management stupidity where I was, gone to Edward Jones, Ameriprise, or another bank. Well, on second thought, you might have a point on that one...
On the other hand I have no dog in this fight at all. I can tell you that if you were not afraid to live in a town large enough to have wirehouses that you would make more money and have the joy of belonging to a team of guys and gals who are fighting a common battle. I think you have a mental dog in this fight. You're proud to have worked for a wirehouse and over the years of looking through wirehouse glasses, you've come to the conclusion that they are far and away the best option. Having not worked in that environment, I don't have that same bias. I wouldn't class myself as "afraid" to live in a larger town...it's simply not my preference. I'm happy to make the 90-minute drive to visit, but I don't want to live there. No doubt I would gross more in a wirehouse setting. The jury is still out as to whether I would net as much (I'm thinking no since I would have to nearly double my gross and I'm not sure if I'd want to work hard enough to do that). Certainly, the "team" feel is not what it is at a wirehouse, and that's the complaint I hear as much as anything, but I'm more of a lone wolf anyway...not anti-social, but I don't crave company as much as others I've worked with. Several of us new indies have established a network to shoot the breeze occasionally, but certainly, it's not on the level of a wirehouse or superregional office setting. At the same time, it's a very small factor in my personal job satisfaction.
Sole proprietorships are not all they're cranked up to be. There are a lot of guys and gals who would trade the abilty to show up at "the office" in their pajamas for the enjoyment of having somebody across the way come and tell you a joke or ask if you've got time to run over to Subway and chat over lunch. Well, other than my nine to midnight laptop work in front of the tv, I don't work in my PJs, and I do have a professional office. The furniture in my office alone was over $12K and I have the best desk chair I've ever sat in (a La-Z-Boy Horizon, if you're curious). I have the comraderie of the employees in the accounting office and I make it a point to eat out routinely with either someone from the office, a customer/prospect, or another local professional (and yes, I go to lunch with several of my competitors on occasion). Honestly, I think I have a pretty nice set-up, but I will allow that many indies live a pretty quiet life.[/quote]
You must be in a good mood today...
[quote=Seeker15]
No offense Jeff but wirehouses have the capital to pay recruiters and make the
best upfront deals. So you might have a little more self-interest involved than
objectivity.
<>
If I valued a recruiter it would be one that is closer to a brokers agent
rather than a paid tool for a wirehouse or banks interest.
[/quote]
I'm pretty open about my status as a recruiter. My advice should be taken
in context, because my fees are paid by the hiring firms. Then again, it
works the same way for my friend who recruits for independents.
Any brokerage would pull my contract if I did not consistently produce win-win
placements. My job is to find a match, no matter who pays my fee.
Successful brokers are very sophisticated and accomplished salespeople. You can see a sales job coming a mile away. The only way to succeed as a broker recruiter is to help both sides understand one another. We make the decision making process more efficient for both the hiring manager and the candidate.
I stand by my record. And I resent being called anybody's tool.
I have seen many people come into our complex from Indy, Banks,
regionals, and Wires. Our average production is about 750k per
rep in the office. Everyone is pretty happy. Most people
that come in did less that that prior, but in a very short time they
are there. I don’t know what it is but it happens. Maybe I
am just dumb, but I like what I see and succes builds success.
Our complex and our firm represents the very top of this business and I
am proud to serve my clients as I do, at the firm I am with, adn the
manner in which they support. If it changes, I will consider a
change but now? Its just fantastic.
[quote=JCadieux]
[quote=Seeker15]
No offense Jeff but wirehouses have the capital to pay recruiters and make the best upfront deals. So you might have a little more self-interest involved than objectivity.
<>
If I valued a recruiter it would be one that is closer to a brokers agent rather than a paid tool for a wirehouse or banks interest.
[/quote]
I'm pretty open about my status as a recruiter. My advice should be taken in context, because my fees are paid by the hiring firms. Then again, it works the same way for my friend who recruits for independents.
Any brokerage would pull my contract if I did not consistently produce win-win placements. My job is to find a match, no matter who pays my fee.
Successful brokers are very sophisticated and accomplished salespeople. You can see a sales job coming a mile away. The only way to succeed as a broker recruiter is to help both sides understand one another. We make the decision making process more efficient for both the hiring manager and the candidate.
I stand by my record. And I resent being called anybody's tool.
[/quote]
Jeff, you're not anybody's tool. Everybody's tool? Sure, but not anybody's tool.
I stand by my record. And I resent being called anybody’s tool.
Jeff, you work for firm fees in the same way real estate brokers work for the most part work for property owners. Investment Brokers (IBs) are like potential property buyers and both (IBs and property buyers talking to selling real estate agents) would be very foolish to forget that people represent who pays them.
This is reality in the dealer system; Your clients are the firms and brokers themselves are items to be processed by firms.
All I stated Jeff is that in a better system you would be a paid agent of producers and compliance would not be tied to firms. Similar to the RIA model but extended to commission activity.
You should embrace my point since you would benefit, if you used a higher skill level that would required in an open producer system apart from dealer captivity. The current system isn't good for producers, the public or in fact potential broker agents who are captive themselves. Of course you are firm tool in the current system. This is an abstact reality in the same way you might say I'm a client or dealer tool, while truthful there was no malice in my statements of fact. You consult for a fee to security firms and the individual brokers interests often are secondary when the actual process is going on.
Would you recruit the same broker twice from the firm you represent?
Jeff's clients may be the firms but he has to ensure that the brokers he places are well suited to that firms environment. If he simply pushes reps at firms where they're unsuitable those firms won't accept his candidates anymore.
And to say that the current system isn't good for producers is ludicrous (sp?). What's good for producers is that there is a large variety of career paths in the Financial Services industry. Wirehouses, Regionals, Banks, Indy's, RIA's, Insurance B/D's all have their place. Advisors thrive under different models, so the more options there are the better off people will be.
[quote=FreedomLvr]
Jeff’s clients may be the firms but he has to ensure that the brokers he places are well suited to that firms environment. If he simply pushes reps at firms where they’re unsuitable those firms won’t accept his candidates anymore.
And to say that the current system isn't good for producers is ludicrous (sp?). What's good for producers is that there is a large variety of career paths in the Financial Services industry. Wirehouses, Regionals, Banks, Indy's, RIA's, Insurance B/D's all have their place. Advisors thrive under different models, so the more options there are the better off people will be.
[/quote]Before using a word like ludicrous you might consider some facts;
Must doctors, lawyers or accountants be registered as employees by definition to collect particular fees?? How do you think they would feel being forced to be "employees" while they take on potentially every other business risk and expense?
Brokers are designed scapegoats, subjected to scaled legal and management system that is highly exploitive. Look at the turnover rates, litigations and conflicts and even judge your trade publications. It's all about conflict and unhappiness on a large scale. Look at these boards.
I haven't said anything negative about Jeff, I've simply pointed out reality among the twaddle sales pitch that recruiters paid by firms are even handed brokers in a human resource function. As for the industry from the brokers view the risks and potential abuse has never been greater and you live in dreamland if you think firms aren't the ones lighting the fires they get paid to put out. Their own gratious posturing in the regulatory process is pathetic. Licenses free of firms would be much better progress and phony qualities of luke warm "independence" of today.
[quote=Seeker15]
[quote=JCadieux]
I stand by my record. And I resent being called anybody’s tool.
You should embrace my point since you would benefit, if you used a higher skill level that would required in an open producer system apart from dealer captivity.
[/quote]
If you feel that an employee-paid recruiting firm would do well, then feel free to open your own business.
The recruiting industry used to be funded by CPFs (candidate-paid fees). Alan Shonberg, founder of MRI was one of those that helped change the way in which the industry functioned and now it is driven by EPFs (employer-paid fees).
Obviously each recruiter will have their handful of key accounts that they will work on that can serve as a "cash cow". Most of these instances are built by relationships. I, too, have worked for wirehouses, regionals and independents. While I worked for Smith Barney, for example, I have found that it is not the right fit for everyone and only represent a handful of offices (3-4) throughout the country where I feel there is a good relationship and I'm not telling a story about Smith Barney, but a story about a specific office or branch manager.
Our group has been around for 37-38 years and we have had many relationships throughout the industry that we have maintained throughout that time. While I think that it is helpful to have key accounts, it is such an advisor-driven business in this day and age (with all of the players in the industry looking for the same producers) that I think recruiters can't ignore the needs of a specific advisor and understand that they may not be buying what we're selling.
Personally, I try to find out what it is that an FA is looking for to see what firm/office may be the best fit for them. If that is a client of mine, great. If not, I may have a relationship with another firm/office that they may be a better fit with. My career is built by maintaining relationships, much like an FA. If I simply try to slam a square peg in a round hole all day, I will not be successful.
When I am working with my mutual fund managers/analysts, for example, I will take a strong candidate into the marketplace (with their permission, of course) to try to find them the right opportunity as opposed to simply selling them on what I'm working on today. It keeps a constant flow of new client acquisitions coming across my desk and I'm still able to recruit on the open positions I have with other clients.
Each industry and recruiter is different. I tend to agree with both Jeff and Seeker that you have to be a consultant for not only the client, but the professional that you are working with, and that may require taking that info out into the marketplace and seeing what else may be the right opportunity for them.
I guess my last post was a littel too aggressive for the forum and was deleted.
BrokerRecruit; My point stands that it is only arcane structures that mandate the “employment” status and that “employer paid” means you are a tool of management. This may be useful for those geared toward employment concepts but an issue for a large group who think of themselves as self-employed or small business owners.
Why do these “you must be an employee” rules still linger? Clearly there are winners and losers in this artificial process. The recruiters are writing nice brochures here while avoiding the substance of my observation; they are conflicted from the point of view of advisers and should step up and admit it. If you really worked for advisers you would be advisor agents not employer recruiters and we wouldn’t be mandatory “employees” to serve NASD interests. The public has certainly suffered for it through every type of firm abuse passed on in the “employment” system; proprietary products, trading conflicts, revenue sharings it goes on a long way.
Registered Rep would be a better more important magazine if it wasn’t “free”, funded mostly by dealer and vendor ads. I’d rather pay a $100 a year if spoke more for producers and less for the hostage holders who demand we be “employees” if we collect a regulated commission.
The recruiters claim they are true consultants isn’t logical and stands refuted. If a real estate broker made such a false representation regarding interests they would be sanctioned. Then again recruiters don’t have licenses specific to their jobs do they?
Seeker - For my clarity, if I were to work with you and, subsequently, place you at the firm that was best-suited for you, you would pay for my services?
[quote=Seeker15]Then again recruiters don't have licenses specific to their jobs do they?[/quote]
There is not a license or group of licenses, per se, but there are designations that one can earn through a series of exams and a required length of service within the industry.
[quote=BrokerRecruit]
Seeker - For my clarity, if I were to work with you and, subsequently, place you at the firm that was best-suited for you, you would pay for my services?
[/quote]In the current system firms would not accept paid agents for producers. They’ll put up contract lawyers but not ongoing agents. They like their cartel but obviously I would rather have you working for me than a firm in the trade.
The key reform is that commissioned trade clients should be able to sign account custodity to advisors who could choose among regulatory approved holding firms. This is similar to the RIA model. Compliance should not be tied to restricting producers choice of clearing firm in the independent channel. Independent brokers should be allowed to issue a negative response letter and move the block of clients or any client to the holding firm they think best. Then firms would be really forced to compete and producers and clients wouldn’t held hostage in dealer retension games. It would quickly bring firms back to the same side of the table as clients and producers.
It’s firm culture that is the problem in this space, just the opposite of what the NASD postures almost all the time.
[quote=BrokerRecruit]
[quote=Seeker15]Then again recruiters don’t have licenses specific to their jobs do they?[/quote]
There is not a license or group of licenses, per se, but there are designations that one can earn through a series of exams and a required length of service within the industry.
[/quote]My point here is that license or no you can still get paid by who chooses you without being a mandated "employee" which is a deliberate tool to restrict advisors and create all levels of useless and even damaging to the public firm excess.
If you worked for a fat top-heavy organization and had enough you could just leave. There would be no requirement you "join" another self-regulatory approved firm to earn your fees would there? Compliance should be independent of "employment" and my point stands regarding recruiters interests; they work for firms. Sure there are good and bad in the limited context of the current system but you could say the same about those selling life insurance at a captive employee company. Producers and the mass affluent public deserve better; a free adviser platform beyond "fee-only" or manadated employees.
Very good recruiters would do better without the restriction but many would die quickly. It's comparable to ending the negociated rate. Today producers are still in hand-cuffs while clients and firms can make as many price decisions as they wish. With client granted custodity on commission trade, independent compliance choices firms would be forced to help producers or die. Right now they have a fat game of pretending that producers are the reason for industry ills firms often design. I'm not saying all sides are perfect but the current systems is absurd, anti-competitve and conflicted where a firm can use a producer for a scapegoat as routine.
[quote=JCadieux]
[quote=Seeker15]
[quote=JCadieux]
I stand by my record. And I resent being called anybody’s tool.
You should embrace my point since you would benefit, if you used a higher skill level that would required in an open producer system apart from dealer captivity.
[/quote]
I own my own business but in the self-regulatory scheme of things it mandates "employment" and have all sorts call me "with jobs".
The post that was deleted got more to the point.
If you feel that an employee-paid recruiting firm would do well, then feel free to open your own business.
[/quote]
I don't disagree with you. The fact of the matter from where I sit is that, yes, I have a list of clients that I work with on the fund and brokerage side that I fill multiple positions for. However, if something goes sour with those companies or they begin to slip in the ways they treat their employees, I will no longer affiliate with them - no matter how good of a client they are or how much money I have made with them. I'm confident enough in what I do that I can replicate these efforts elsewhere.
I take satisfaction in connecting the right people with the right companies, not throwing $#!t against a wall and hoping that it comes together so that I can cash a check. I don't limit myself to pimping one or two companies because there are different lids to every jar.
We are paid by the clients because we are bringing someone that will improve different things - assets, revenue, analysis, whatever. I would think that if a rep wanted to pay me for my services, they are a fool. Does that make me a tool of management? Not at all because they do not dictate how I spend my time or what I work on - my boss doesn't even do that. I have full autonomy on how I spend my time, who I work with, how much time I spend on those searches because, at the end of the day, it affects me moreso than anyone else.
Does that make me a tool of management?
You are paid by management, that’s who represent.
The systematic points have been made but aren’t flattering to recruiters so they are ignored in the non sequitur responses of these interests.
Recruiters can be useful in the current system but they are often stooges as this thread indicates. Brokers would be better off with agents they pay and the term “rep” should become as insulting to most as it is intended by the people delivering here who need that to validate themselves. The topic is beyond the recruiters here or more likely it’s the “I’m just too stupid to follow what you have stated plainly” approach to rebuttal and discussion rather than address a factual point directly; brokerage management #101. Small wonder most producers distrust both recruiters and mangement much of the time.
Please read my previous posts. I don't simply represent management. Sometimes I do - yes. Most of the time, I don't.
We are all paid by someone. Your clients pay your fees - do I consider you a tool of your clients? No. We are all serving someone, chief.