Results for "On Recruiting"

Oct 10, 2016, 4:55 PM EST

How big wealth management firms should treat top-performing advisers to keep them happy

By Danny Sarch

In past columns, I have been critical of the big firms' inability to treat their best performers differently. I have hypothesized that the primary reason why advisers depart the employee model of the big firms to go independent is not financial but because they desire to be free of onerous policies and procedures that do not distinguish the skilled veteran from the neophyte. I received an email which asked: “Okay, Sarch. You are the King of Big Brokerage House Land. How would you treat your best people differently to keep them happy?”Fair question. But first we need a better, more accurate way of defining who those top performers are.(More: We need a new vocabulary in the wealth management industry)Of course, in the wealth management industry, size matters. Advisers are compensated and recognized based on the amount of revenue they generate and their assets under management. For the 30 years I have been recruiting in this... Read full post

Sep 9, 2016, 2:28 PM EST

How to protect yourself from bad clients

By Danny Sarch

As the controversy surrounding the DOL Fiduciary rule swirled this year, Wall Street was made out by regulators to be a predatory monolithic entity that was lurking and waiting to pounce on poor, unsuspecting, naïve clients, cheating them out of their hard-earned retirement savings with high commissions. However, if you drive down the I95 South Florida corridor, there are multiple billboards for attorneys who promise that they can recover clients' stock market losses. Take a few seconds and Google “losses in the stock market” and watch the attorney websites roll down your page. There is an established industry that attempts to convince clients that all stock market losses are recoverable via legal action. And since every mere accusation will appear forever on an adviser's BrokerCheck record, it makes sense that advisers should take every precaution to avoid a litigious client.In a perfect world, there would be a... Read full post

Aug 12, 2016, 6:24 PM EST

We need a new vocabulary in the wealth management industry

By Danny Sarch

It seems to me that the wealth management industry has grown out of the traditional labels that we have used for decades to describe various companies, causing tremendous confusion for both clients and industry insiders. Let's take, for example, the term “wirehouse.” The term was originally meant to describe an investment firm which had multiple offices which communicated with their home office via “wire.” Clearly this definition is archaic. However, if you ask anyone in the wealth management industry to list the wirehouses today, a vast majority would give you the names of same four firms: UBS, Merrill Lynch, Wells Fargo and Morgan Stanley. After all, these are the largest, right? Well, no. Ameriprise is larger than UBS and Edward Jones has more branches, if not more advisers, than all of them (though their business model is one adviser per branch). Perhaps these are the national firms, you say, and therefore... Read full post

Jun 3, 2016, 2:09 PM EST

Why Finra needs to fix BrokerCheck now

By Danny Sarch

Richard Ketchum, head of the Financial Industry Regulatory Authority Inc., recently warned brokerage firms that they need to create a culture of compliance which prevents high-risk advisers from harming investors. As quoted in InvestmentNews, Mr. Ketchum said: “No firm that tolerates such a concentration of 'high-risk' advisers should do so without expecting searching questions from Finra as to the special supervisory steps they have taken to ensure no further bad actions.” With the Securities and Exchange Commission likely to soon announce their own version of a fiduciary standard for non-ERISA accounts on the heels of the recent Labor Department rule, there appears to be a tremendous amount of momentum around exposing and eliminating bad behavior by bad brokers. One of the tools to expose problem brokers is BrokerCheck.Finra's BrokerCheck used to be an obscure tool used only by industry insiders to check the employment... Read full post

May 9, 2016, 6:37 AM EST

How the DOL fiduciary rule could affect financial adviser recruiting

By Danny Sarch

As everyone in the industry knows by now, the Department of Labor issued a 1,023 page document in April which defines a new fiduciary standard for broker-dealers who have clients with assets held in retirement accounts. All of the brokerage firms are studying the document and figuring out what they will have to do at both the corporate level and at the adviser level to comply. Definitive communication from the top to the adviser level about what will be expected of the adviser under the new regulation has yet to happen. What will be the new rule's effect on adviser movement and recruiting?1. Advisers who are already considering making a move are paying attention to time deadlines that will be forced upon them by their current firm.Critics and proponents of the new regulation are arguing over many things, but no one disputes that firms, their advisers and their clients will have new paperwork for their clients to sign. This paperwork on ... Read full post

Apr 8, 2016, 6:54 AM EST

Brokers: Either move toward a fiduciary standard or have it forced upon you

By Danny Sarch

As everyone in the industry knows by now, the U.S. Department of Labor finally produced its fiduciary rule for retirement accounts. Fought for months by the brokerage industry, the final iteration of the new regulation gives a much longer runway for brokerage firms to be in compliance. It also creates a Best Interest Contract Exemption, or BICE, which enables clients to still pay commissions in their individual retirement accounts as long as their adviser contractually promises to adhere to a fiduciary standard. In addition to information about the rule, the DOL's website also features interviews with investors who had lost a significant percentage of their retirement assets, presumably from the result of “bad brokers.” Does the DOL truly believe the new regulation will prevent this type of behavior? I have sympathy for the families of those depicted on the website, but believe that the regulation, had it been in place,... Read full post

Mar 29, 2016, 2:48 PM EST

Lesson from Bank of America settlement with Merrill Lynch trainees: Long hours required to make it

By Danny Sarch

Bank of America recently settled a lawsuit originally filed in March 2015 that alleged Merrill Lynch had violated federal overtime compensation laws. Each aggrieved ex-Merrill Lynch trainee would be entitled to about $1,000 after legal fees were paid, according to the press coverage of the settlement.I spoke with four separate Merrill Lynch advisers, each with at least 20 years of experience, who all expressed some combination of distaste and disdain for the plaintiffs. Each adviser vividly recalls attending meetings during the 1980s where a successful veteran adviser spoke to his training class. The message from the veteran resonated with these advisers 30 years later: “Work like very few can for three years, and then you will be able to live like very few do for the next 30 years.” Long hours dedicated to establishing relationships with new clients were an understood part of the job. Methodologies varied. Some trainees... Read full post


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