YOUR PRACTICE: Cyber-recruiting comes to advisers via new site
Dec 21 (Reuters) - Financial advisers wondering what it would be like to work for a rival company have a new way to test the waters.
The website The Advisor Center lets advisers create free anonymous profiles so they can research other companies and chat online with hiring managers. The advisers do not reveal their identities until they are ready.
Anonymity could be a relief for advisers who get bombarded with sales pitches from competitors. Advisers who produce a lot of revenue - around $1 million a year - often get daily calls from recruiters.
The challenge for the site, which launched earlier this month and has not yet led to a new hire, is to create a critical mass of advisers and companies. Two companies that subscribe told Reuters they have yet to have any conversations with advisers, and a third said it has had one conversation.
And advisers may be disappointed that the site does not currently have partnerships with many of the nation's biggest wealth management firms, like Morgan Stanley Wealth Management or Merrill Lynch Wealth Management. Right now the site's subscribers include independent broker dealers LPL Financial and Commonwealth Financial Network, registered investment advisors U.S. Wealth Management and Edge Portfolio Management, and financial services company Pershing.
Founder Tom Daley is confident he has found a game-changing approach to recruiting and expects to sign up several big companies and thousands of advisers in the coming months.
ANONYMOUS JOB HUNTING
Advisers who use the site submit their legal name, address, industry certifications and company. Once validated, they go incognito with a profile that hides personal information, providing their state, type of company and ranges for their revenue production and assets under management.
Users can then explore the nearly 40 subscribing companies, including their financial metrics, like a breakdown of company revenue, as well as areas o f expertise, company benefits and staff ratios. If they like what they see, they can initiate an anonymous online chat. They also may hear from companies that see them as a good fit.
The site charges companies based on a tiered system. Companies with $100 million or more in annual revenue pay $25,000 annually, while small registered investment advisory shops pay an introductory rate of $2,000.
The site also gets an additional fee if a hire is made. Large broker dealers pay 2 percent of the advisers' previous 12 months' revenue. Registered investment advisory shops pay 2 basis points on the assets the adviser moves to the new firm in their first six months on the job.
Daley, who spent nearly 19 years recruiting for LPL Financial and other wealth management firms, said these rates are substantially lower than the typical 6 percent fee charged by traditional headhunters.
A couple of those traditional recruiters said the site's premise is intriguing but advisers who forgo their help will miss out on having objective advocates.
Veteran recruiter Mindy Diamond said advisers who negotiate directly with the company may forget to ask critical questions, like how many sales assistants will be paid for and how the advisers will be protected if their old companies take legal action when they leave.
"The introduction is the smallest part of my job," Diamond said.
Daley countered that the majority of advisers transitioning to new companies do not use third-party recruiters, and advisers can hire a lawyer if the negotiations get tricky.
TIME WILL TELL
Companies on the site said they're willing to be patient while it grows.
Andrew Daniels, managing principal of field development for Commonwealth, recommended the site highly even though it has led his company to only one adviser interaction so far.
Daniels thinks the site will get traction from its partnership with the job search engine at the industry publication Investment News.
Tarah Carlow, head of marketing for Dallas-based Prospera Financial Services, which pays $5,000 annually to use the site, said she hopes that in the next year it leads to at least one hire or about a dozen meaningful conversations with advisers. If only the latter occurs, she will just think of the subscription as a marketing expense and renew it.
For now, however, Carlow is waiting to hear from the handful of advisers she's initiated contact with on the site.
"I think it's a great concept so I hope it works," Carlow said.
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