One manager of a large wirehouse complex outside of New York agrees. "The hiring process really scrubs advisors' books now. Compliance requires that the advisor disclose all aspects of how they go about doing business."
In the past four months or so, I have had at least five managers walk away from potential deals due to this overwhelming frustration level. It's understandably difficult to get people to sit down for hours on end and describe every detail of their professional life to you, especially when there's no deal on the table yet. But walking away doesn't help matters. Let's face it, nobody likes a quitter. The current recruiting market requires extra effort from both the managers and brokers.
I recently received a call from a manager who was angry about the negative reaction from a potential recruit after receiving a two-page email about seemingly unimportant questions. The advisor's point of view, no doubt, was this: 'Why do I need to answer all these questions when all I want to know is what the deal is and whether the new firm will cover my vested deferred comp?' Meanwhile, the manager was thinking: 'For me to get you the best possible deal, I have to answer all these questions for them.'
Everyone needs to calm down. To the managers in this situation, I would suggest that you need to clearly communicate to advisors the necessary steps to get a deal. Having some empathy for your recruits is a necessity these days. Throwing fits will not help achieve what you, or anybody else, wants. It's also good to let the advisors know the basics of the deal so the offer doesn't come out of left field. In short, you have to manage expectations.
And let's check the egos at the door. Belittling someone's work doesn't get you very far. A couple months back, one of my recruiters' candidates walked away from a potential deal because the sales manager basically called him a loser. The sales manager had said that the $450,000-producer who's a 20-year veteran, didn't really qualify for much at his firm. So maybe he's not that large a producer, but you shouldn't say it that way. The advisor was ready to sign, but now he wants to spend another five years at his current firm to try and get the book up. Nobody wins in that situation.
Now, on to the advisors. Times have changed and it is simply more difficult to get a good deal on the table than it was a couple years ago. There's good news, though. The potential deals are huge and the extra effort is more than worth it. Managers don't mean to be a pain in your neck. But, they want to be able to present you with a formal offer. This means a lot of paperwork on your part and answering many miscellaneous questions that they, in turn, must present to the hiring authorities and recruiting departments. Believe me, if it were up to them, they would trust you and just fill out the check themselves. Unfortunately, it's not up to them.
Yes, the new process is time-consuming. And yes, you must get all the proper paperwork completed for the hiring firm to peruse. Rest assured, though, you aren't the only one who has been required to get the information. Many advisors have come before you in this ongoing parade, and many more will come after, who will endure this same process to get these specifics. Hiring firms don't just make up the forms and reports as a sort of obstacle course you have to run for their own amusement. So complaining about it and throwing conniptions won't change anything. Risk management and compliance aren't going away anytime soon. Just figure it out and get on with it.
As for specifics on how your business is done, be forewarned: The necessary information has to be provided, and any subsequent issues discussed-before the transition. Low priced securities, remote access requests or special technology needs, lists of alternative investments, client account exceptions and special needs, number of accounts using ACH, Rule 144 loans, control person accounts and safekeeping/physical certificates are just a few topics that need to be covered.