It seems like it's every business day that I get a call from an unhappy wirehouse Branch Manager:
“I don't like it here. I'm making less money and have twice the responsibility.”
And then I hear the story: The difficult decision to give up the book years ago to go on a Management track. It starts with a sales manager's job, then a few relocations, dealing with regime changes, political minefields, the changing compliance landscape and unbelievable wide swings in compensation.
The Headhunter asks: “What are you earning now?”
The response is usually some version of the following:
“Well, last year was a decent year but for next year I'm not sure whether my position will survive or my office will be consolidated. And during my best years, I made twice what I'm making now. So ideally I'd like to get back to that level of 2006 or so.”
Remember “The Pink Panther Strikes Again” from 1976? Through his usual slapstick shenanigans, Inspector Clouseau (Peter Sellers) reduces a piano to splinters:
Mrs. Leverlilly: “But that's a priceless Steinway!”
Clouseau: “Not anymore!”
Now, many of the Branch Managers who call me have their eyes opened to the changing dynamics of the industry which has reduced their value. Simply put: the retail brokerage world is long Branch Managers. Increased supply and reduced demand means that as an occupation, being a Branch Manager will just not pay as much today and in the future as it did in 2006. The managers who are earning what they did a few years ago are covering multiple branches with much more responsibility.
Because the firms feel that they have multiple candidates vying for the best jobs, they are emboldened to change compensation plans arbitrarily. The best defense for a Branch Manager in today's environment is a good offense: Be an effective recruiter and proactively add value to the Advisors in your branch every day.
I do believe that the pendulum will swing back at some point in the future. There are a number of Branch Managers who have gone from one firm to another and quite a few others who have started or joined entrepreneurial enterprises within the industry. The bottom line is whether these Former Big Firm Managers can attract production to their new firm. If they can, then big firms will pay attention and pay their current team better. But that's at some time in the future, hopefully the near future.
But to those who long for the past, before the industry and the world changed, keep that image of the splintered piano in your head and remember Clouseau's brutally honest assessment: “Not anymore.”
