The wealth management industry is a candidate-driven marketplace these days. And yet it is possible for an advisor — or a prospective new employer — to mess up a hire.

Such difficulties really should not be happening. Since there are more advisors retiring every year than there are new advisors entering the industry, and since the retiring advisors have much bigger practices than the new advisors, demand for productive advisors far exceeds supply.

Current wirehouse advisors with established practices have more choices than ever before. They could go from one large firm to another for a very large check. Or they could go to a regional firm. Or they could start up their own firm from scratch. In short, the portability of an advisory practice makes this an opportunity for top advisors.

Yet, even in this freewheeling environment, where virtually every type of ambitious advisor at almost every level of production should be able to find a new home somewhere, it is possible for an advisor to blow up his or her deal.


Here are some of the mistakes that abort potentially lucrative new relationships.

Sometime early in the interviewing process, your prospective employer is going to check your criminal, credit and compliance histories. In addition, sometime during your first few months at the new firm, the HR department will confirm your work history and educational experience.

While there are many advisors who have perfect compliance and credit histories, there are others who have a blemish of some sort on their records. The single biggest fear that any firm has in hiring or affiliating with a new advisor is that he or she will end up being an embarrassment to the franchise and the brand.

As an advisor looking to move, your job is to "front run" any problems that exist and address them at the beginning of the process. Anything on your record that you did not explain ahead of time will be seen as an attempt to hide something bigger.

A few years ago, I was approached by an Edward Jones advisor who was unhappy at the time with his firm's technology and support. He told me that he wanted to be in a bigger firm and, more important, he wanted the stimulation he felt he could get in a larger branch.


Over two weeks, he had two good meetings with a branch manager from a wirehouse. While his record was spotless, he had neglected to tell his prospective employer that he was under investigation for "improprieties" related to bookkeeping within his Jones branch. The wirehouse manager with whom he had been meeting discovered this when he overheard some advisors talking in a bar one day after work. Not sure of the truth, and not wanting to rely on gossip, the branch manager asked his prospect directly what he had heard. The advisor admitted the investigation was real, but argued he was not guilty of what his firm was looking at.

If the advisor had spoken of the investigation early in the process, the branch manager might have believed him and proceeded with the due diligence process, albeit cautiously. Instead, fearing that the obfuscation was indicative of character weakness, he ended the process. The advisor stayed at Edward Jones. Word spread about what he might have done, and his opportunity to move, at least for the time being, disappeared.


When my firm sends a candidate out for a first meeting, we make sure that he or she is familiar with his or her FINRA BrokerCheck record.

 If you have anything listed, from the trivial to the serious, your new prospective employer will want to know about it. Did someone allege that you promised that IBM's stock price was going to double in a month? It might have been denied, but your suitor will want to hear the details.

If you have substantive issues on your record, like a settlement or a bankruptcy, the details that you provide beyond the official documentation will be important.

Think of your prospective bosses as possible investors in your business. You want the money and they want to know that the money they invest is as riskless as possible. They are worried about whether you will deliver. More important, they are worried that any new hire will harm their reputation and possibly cause them to lose clients.

Culture also counts. Last year, we had a candidate visit a client's home office. Though he was meeting with senior leadership in the headquarters of a major corporation, he somehow thought it was all right to wear a golf shirt to the meeting. His excuse was that he was playing golf after lunch. No deal.

Contrast this with another advisor, interviewing for a management position, who called me and explained he had broken his foot and was forced to wear sneakers. He said that even though he could wear one dress shoe and one sneaker, it seemed both easier and more comfortable to wear sneakers on both feet. Forewarned, we made sure everyone he met knew the reason that he was wearing informal footwear. The deal was made.

Perhaps the most unexpected way an advisor can blow his deal is inappropriate conduct. While sitting in a branch manager's office, my candidate watched the manager's female assistant walk by and delivered an approving nod, wink and smile to the manager. Instead of thinking of how this recruit would bring new assets and revenue into his operation, all the manager could think of was how many sexual harassment suits he might have to endure if he were to hire this advisor. No deal here either.

Branch managers are not immune to stupid mistakes that make prospects run in the opposite direction. Even worse, stories about these mistakes may be repeated to other advisors, thereby making future recruiting more difficult, if not impossible.

One common mistake is bashing the competition. Advisors hate it. One wirehouse advisor told me: "My firm is not perfect. I'm there meeting the guy. The more he bashed my firm, the more I had to defend it. It's like calling me stupid for staying at my firm. I'm still making $500,000 a year. How stupid can I be?"


A particularly dangerous mistake that a branch manager can make is to breach confidentiality. Since advisors are at-will employees, they can be fired if their current firm believes they are about to leave.

A manager who is known to be indiscreet will damage his own reputation beyond repair. Sometimes the indiscretion is inadvertent, like leaving a business card of a possible recruit on a desk. But sometimes the manager cannot resist the temptation to boast about the meeting to a colleague or another recruit. More often, the manager will talk about the recruit under the guise of "checking them out." When word gets back to the advisor, as it inevitably does, the deal is dead.

For the branch manager:  Be genuine; sell your story and your firm's story; and show that you actually care about your recruit beyond the transaction. Do all this and avoid the pitfalls, and you will attract recruits who fit.

For the advisor seeking a new home: Front-run your past and possible future problems. Be transparent about what you truly need and what you possibly want. With the right due diligence, the right home will become apparent. 


Danny Sarch is the founder of Leitner Sarch Consultants in White Plains, N.Y.

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