For those who work under him, problems rarely are solved unless it's due to an assistant who's constantly running cover up for the managers lack of interest or organizational skills. Unless you are a team or an advisor whose business is totally self-sufficient—which is never the case in today's compliance-ridden marketplace—the non-communicating manager can cost you big bucks.
The same holds true in the recruiting process. If you find yourself in the dark most of the time, chances are you are losing some of your well- deserved bonus and, more often than not, it's heading back into the recruiter's own pockets.
A Familiar Feeling
So what's a potential recruit to do if he's already familiar with the particular charms—or lack thereof—of a manager?
Case in point: Arturo, who's on the brink of what he thinks may be a good deal, but is hesitant—and for good reasons. Arturo asked me to review the deal that was put in front of him by a competing wirehouse, a deal that I wasn't initially involved with. Arturo does $1.5 million in production with over $250 million in assets. His book is predominantly domestic, but does have some Latin American business. His average account size is well over $1 million, and he has a clean U4. Arturo confessed to me early on in our meeting that, although he had known the manager at a previous firm, he didn't feel very comfortable with him. That manager would never return his calls and rarely got back with the answer to a question.
Being familiar with the particular manager, I was able to understand exactly what he was saying. He wouldn't just treat Arturo this way, it was anybody who came into contact with him. I never understood why companies would keep replacing this type of manager with the same kind. Truth be told, there were at least two or three others before this one with the same issues.
I checked around the country for various deals managers had offered advisors with similar books. Sure enough, Arturo's offer wasn't up to snuff. He could potentially get up to 10% more in the upfront bonus versus in the back-end, for starters. Since Arturo's trailing-12 is around $1 million; the amount he should have been offered was almost $100,000 short of his competitive value. In addition, the back-end bonus hurdle was higher than normal, and there was a chance that his assistant could come with him.
Whether the manager is incapable of multitasking or doesn't value Arturo as a hire, we'll never know. What we do know is had Arturo not ask me to review the offer, he would have been leaving $100,000 on the table. My advice to Arturo? Find another manager or company.
When it comes down to it, managers' bonuses are based on Profit and Loss. Recruits generally are a big L for the first couple of years. A shortsighted manager, or one who doesn't expect to hold his position for very long, will try to reduce the immediate loss impact on his P&L sheets by lowering the deal to unsuspecting recruits who don't have a recruiter to perform the necessary due diligence. As a matter of fact, it happens all the time. There are just too many good, open and honest managers out there to be wasting your time with one who isn't.
One of my recruiters right now has a similar case with a very large producing team in the South. Their production is north of $3 million with assets well over $500 million and, once again, a clean book and U4. The manager quickly accepted and went on the meeting with the team since they were so large. Then, after getting valuable feedback from the recruiter on what the team's real issues were, the manager was quick to announce "I already know them, so I don't want to pay you for that."
The manager then advised the team leader to not keeping talking with the recruiter..."Why should you? We have known each other for so long..."
Oh boy, that's just the kiss of death. The firm is still obligated to pay for the introduction, but now the candidate doesn't really have anyone to rely on to give them honest feedback and look out for their best interests. And, it's all happening because of the manager's short-sighted greed.
At first it seemed as if the management team was just extremely disorganized. The left hand didn't know what the right hand was doing. The assistant would call up the recruits and set up meetings to have the manager not go. The manager, in this case, came off as being underhanded or nefarious. Come deal time, I fully expect it won't be nearly as good as a deal as deserved or warranted.
