So, what are firms doing? Well, many have raised the stakes for the talent that is there, increasing upfront money to 150%+ of trailing-12 (albeit with milestones that new hires must achieve to get all the money). Some are offering as much as $50,000 hiring bounties for internal referrals that lead to a hire. But in the bank channel, many investment program managers are still relying primarily on the “prayer method.” That is, many banks (with the exception of the biggest players, who look and act like wirehouses anyway), are hoping someone good will call or walk in and see the value of their program as opposed to the “inferior” program at the competitor across the street.
Yes, there is some proactive search going on, but from a total industry prospective, banks are in last place in terms of aggressive recruiting strategies. There’s no doubt that some banks have been very successful in drawing advisors from other banks, as well as from some of the national firms. That promise (real or imagined) of a constant stream of referrals is a very powerful draw.
But banks have another major advantage over other players in financial services when it comes time to staff up that they’re not using: the ability to develop and promote from the platform. Whether using a structured career development program, or just recognizing talent and drive, promoting from this “farm system” of CSRs and branch managers, etc. is a major plus.
But just having a pool to draw from isn’t enough. And that’s where the real problem in recruiting lies. Many of the players—from the biggest programs to the smallest community banks—have not invested nearly enough in developing a comprehensive recruiting plan including drawing from their own talented professionals. It takes both time and money to identify potential, train, educate, develop and ultimately retain the next generation of FAs. While some banks have invested in their future people, most have chosen the short-term fix and like so many others are chasing fewer and fewer prospects.
I’m not suggesting that banks stop looking for experienced FAs from competitors. But given the competition, the demographics and the shrinking supply, focusing only on experienced FAs and not investing in developing their own talent is a losing proposition.
Paul Werlin is president of Human Capital Resources Inc.