There is dissatisfaction within the ranks, our experts say. There is an end to blind loyalty and, of course, the management changes at the various firms may not be viewed with much enthusiasm. After all, change is difficult to take for anyone—especially when it has an effect on your livelihood. So read what our recruiters—Carri Degenhardt-Burke, Mindy Diamond, Jonathan Manela, Danny Sarch, Rich Schwarzkopf, Mickey Wasserman and Bill Willis had to say when we met on November 2nd in Lower Manhattan.
FRANCES McMORRIS/OWS: I want to start off with the new guy in our group [Jonathan Manela]. So how was recruitment in 2011 and what's it going to be like for 2012?
JONATHAN MANELA: For Rainmaker, 2011 was a good year. We hit our goals. It was consistent throughout the year. We feel good about what we're seeing going into 2012.
OWS: Mindy, what do you see?
MINDY DIAMOND: The retention packages at the major firms had a significant impact on movement in general. So it was a good year; it wasn't a great year in terms of a lot of movement. We expect 2012 to be a robust year in terms of movement.
OWS: Carri, do you agree with that?
CARRI DEGENHARDT-BURKE: Yes, definitely. Degenhardt Consulting has actually had a very good 2011 but unlike in past years, there was really no clear-cut winner with my clients. But we expect 2012 to be very strong.
OWS: Rich, what are you seeing?
RICH SCHWARZKOPF: I'm not seeing that. I think it's slower. I mean last year it was 50% less movement in the industry as far as brokers moving. I don't think it's changed much. Since we work on a fee basis, it's good, but I see a lot less movement and I don't think 2012 is going to be much different.
MICKEY WASSERMAN: I agree that retention packages have slowed movement in 2011. It's slightly better than 2010 but as they start to evaporate, yes, we're going to see a lot more movement, and 2012 should be very good. There are a lot of unhappy brokers out there.
OWS: So Danny, are you predicting a stronger recruiting season for next year?
DANNY SARCH: I think 2010 was, in my mind, a hangover after 2009, so I'm not going to say it was welcome. It slowed down. It's never fun; 2011 has been terrific, so it's a really good year and I expect the same in 2012.
BILL WILLIS: It was a good year for us and better than the previous year—and ending strong. That foreshadows a very strong 2012. There are really two reasons for that: retention packages are amortizing. There is less in those packages, and firms are getting more aggressive. That combination makes the numbers work for some people.
CULTURE CHANGE
OWS: What are some of the other reasons that you think there's going to be movement?
JONATHAN MANELA: There's an obvious February/March for Merrill Lynch where we're seeing some of the largest levels of dissatisfaction with advisors specifically some of the tier one teams. February/March they have deferred comp is going to get paid out. It seems that many firms are picking that money up. They're going to vest on some deferred comp and they're going to vest on a portion of their retention bonus. The foundation has been laid, and I suspect going through that first quarter should be strong, very strong.
MINDY DIAMOND: I think that 2008 and 2009 was the beginning of the end of blind loyalty. You combine that with the fact that for the larger producers, February/March early 2012 is that inflection point in terms of marrying the economics. You've got an increasing frustration level, lower loyalty and the economics become freer, we're going to see a lot of movement.
DANNY SARCH: You've got two major players with very strong cultures that are now becoming part of everybody else. I agree; the loyalty is just destroyed from that standpoint. It's one of the ironies that UBS is able to keep that. They made a management change, which was seen as a positive, but they haven't gone through a significant merger like some of the other firms have. Wells Fargo is proud almost of their mutt culture. I don't say that in a pejorative way. They've always been a place where a lot of places have been brought together.
