I am looking to my other fellow advisors for help. What I am trying to determine is what is the right price for my firm to pay to keep me and all the other advisors in my situation or if they should pay anything at all? I believe the more opinions the more statistically relevant the information. So please advisors share your opinion as well as producing managers, but please no home office staff, non-producing management , firm executives or recruiter opinions needed.

My situation is I am a $500,000 plus producer with over $100 million in AUM and no black marks on my record. I had been with a fantastic firm that received accolades from J.D. Powers as being the best for advisor satisfaction, highest rated by client’s for trusted advice, fees and service by numerous national ratings companies and publications. My firm was even rated as one of the best places in America to work, and that fact was clear for we hardly never lost a fellow advisor to another firm. The firm’s advisor retention was second to none! The firm was conservatively managed and had zero long term debt. These qualities made it irresistible for a takeover.

I guess what happened is the other firm must have followed the “Can’t sell them on joining us, then we will buy them!”. When they bought us it was like management talking right out of my firm’s mission statement. Yes, my previous firm had a mission statement the shared their ideals in writing with employee, shareholder and client. They talked about “culture”, “caring” and “ethics”. So they started by giving us a retention package which required us to sign loan agreements with them. They said we would have great payouts that would be simple, but definitely not like the previous firm (Thus, the 1st cut in payouts) resulting in a 24% payout on first $10,000 and 50% on all amounts over that monthly hurdle. They also instituted penalties for ticket size and discounting. The next year they cut our payout again (2nd payout cut) and the 24% dropped to 22% on first $10,000 and all other held firm. The firm then cut drastically our support staff at the office. Our office went from 8 to 3. Yes, you to as an advisor can answer the phone so the assistant can eat lunch or go to the bathroom. Then the firm the next year cut our payout again (3rd payout cut) the 22% on the first $10,000 went to first $11,000 and most of the rest stayed the same except for discounting on new fee based would follow a new policy with lower payouts if you deviate to much. Specifically, we were told by the firm’s CFO that “I know you say it is a 1% world but it really isn’t!”. The neat thing is how they changed the payout. They could have left the $10,000 the same and just lowered the percentage to 14.2% from 22%. I guess they wanted to be more sensitive to our feelings of seeing our payout on the hurdle cut by around 56% lower. They will most likely cut our payout again next year, because they have given ZERO assurance, guarantees or statements indicating they will not touch payouts again.

So as you can see my has been cut pretty good and consistently since being on this wagon ride. How have my clients fared? Good question. I no longer can offer free accounts to them. We charge for every account unless it is over a certain level, however we are given a small amount fee waivers but this also has been cut steadily. We can’t discount as much as previously without having our payout cut, and as you know they are already being cut steadily with no end in sight. I guess this is why my current firm’s clients rated us dead last in an extremely prominent ratings firm’s survey on Investor Satisfaction with their firm. Yes, it was about 5-years prior that my firm was at the very top. As a side note, my firm also has the distinction of rating dead last in advisor satisfaction with the same rating firm that we used to put their awards on our countertops with extreme pride.

So my payout has been cut, the level of service provided to me has been dramatically cut and the morale is in the dumps. I guess it is not good for morale when management is thought to have montra of manage out of business some advisors.

So next year marks an interesting milestone, my original as well as many of my fellow advisors loan agreements mature. No more handcuffs. So as my long winded story shows, how should these events be rectified. I mean I know management continues to grab the unaware advisor occasionally from other firms trying to keep our firm’s steady decline in head count from not alarming on lookers. That doesn’t help me or my fellow advisors. I know from my firm’s CEO one bit of good advice that he gave our firm. It went something like this “Do not just listen to someone’s words! It is their actions that tell you really who and what they are about!”. So I think I will take his advice to heart and not let executive talk interfer with my decision making. So the only thing left is action!

What action or actions should my firm be required to offer to make up for the past? Would it be a retention package? If so, would it need to be sufficiently high that it recoups the dollars lost from past payout cuts and should it be high enough to get total comp over the next period over a 50% payout? In order to do that should the firm put in writing the payout plan and guarantee that over the term of the agreement that it will not be changed other than to improve the benefit to the advisor. I mean should it be something like that? What should they do to get the clients feeling better about the firm as well? I guess what is needed is positive actions from management, but more importantly what do you think?