An Advisor called me recently to tease me about some of the columns I've written recently about how difficult a Branch Manager's job is. “The best Branch Manager is the one who stays out of my way! You are just writing those columns, Sarch, to kiss up to those losers.” Interesting perspective. How many out there agree with this sentiment? Please comment and let me know.
I personally think that the best Branch Managers truly make a difference in the businesses of the Advisors in their branch by being value added. What percentage of them can truly say this is the case? I suspect that we are about to find out.
For example, as a group, legacy Smith Barney Branch Managers/Complex Managers are unhappier than any other group of managers I have seen in 25 years. Unhappiness breeds movement and I suspect that many managers will move in the next few months. Two giant questions over the next year will determine Branch Manager compensation within the wirehouses for years to come because circumstances are conspiring to test the question of Branch Manager value:
Will the departing Branch Manager be able to recruit his or her legacy Advisors?
The most honest of the bunch will say that they don't know how many of the old troops will follow him or her to the new shop. Some inevitably will. If 20 complex managers within Morgan Stanley Smith Barney move to competing firms during 2010, and each one takes $10 million in production, that's $200 million out the door. Even for a firm this large, that's a significant number. In this case, perhaps the firm will pay attention to the reasons why their managers are so unhappy. However, if, say, only $60 million leaves, then senior management will be emboldened because very few of those that move will have a “book” of Advisors who will follow.
What will happen to the productivity of the Branch left behind?
Will Advisors flee to greener pastures, not just to where the old boss went, but to the rest of the street? Since I hypothesize that the best ones are value added, does that mean that production will fall with the star leader gone or will another charismatic leader step in effortlessly and fill the void? If the latter is correct, then the future of compensation and recognition of all types for these guys is bleak. Why should firms pay Branch Managers well if they are so easily replaced? However, if these proud franchises stutter and stall like a 20 year old Chevy, then you will see another front open in the wirehouse recruiting wars, this time for the best Branch Managers.
