New Broker Disorientation

Firms are paying gigantic transition packages these days, but they are cutting corners when they bring a new financial on board: There is an almost complete absence of so-called on-boarding, or integration training for new hires, in the brokerage world. On-boarding is a customized coaching process to ensure that essential new-hire talent is properly oriented, integrated, developed and launched says

Firms are paying gigantic transition packages these days, but they are cutting corners when they bring a new financial on board: There is an almost complete absence of so-called on-boarding, or integration training for new hires, in the brokerage world.

On-boarding is a “customized coaching process to ensure that essential new-hire talent is properly oriented, integrated, developed and launched” says Debra Jacobs, CEO of Innolect, a firm specializing in the challenges of successfully on-boarding new hires. By identifying specific success factors, selecting relevant and critical “first 100 days” goals, providing coaching support and coordinating communication between, as well as managing the expectations of, the individuals who will work with the new hire, a firm can help that person become productive more quickly, Jacobs says.

Although many brokerages have “transition teams” that assist brokers with their ACATs, the ordering of business cards and the set up of advisor workstations, very few of them have made any significant effort to adopt a more comprehensive approach to assimilating new advisors.

It's an especially pressing concern given that financial-services firms are making such large investments in transition packages and recruiting fees — with the expectation that these candidates will hit the ground running and quickly ramp up production. Certainly, every firm desires to have a newly hired advisor bring over 100 percent of his assets, and to have that advisor maintain, and even increase, production. Think of the revenue that could be maximized (and the good will that would be created) if an advisor could maintain his production level from the get-go. The cost of an on-boarding program would be quickly eclipsed by the advisor's accelerated attainment of previous production levels.

Culture Shock

Recent recruiting experiences have convinced me that there is a pressing need for such programs in the brokerage world. Many transitioning brokers come from firms where they have spent their entire careers. It can be terrifying to leave behind the culture on which they built their careers, and the comfort of knowing just whom to call when a problem or a question crops up. Indeed, it is these two things that advisors tell me are their biggest stumbling blocks when they switch firms.

Consider a multimillion-dollar producer who is about to move from a private bank, where she has spent the better part of her 20-plus year career, to a wirehouse firm. While her focus has been on dollars and cents and administrative details in her acceptance of the offer, as she nears transition day and her anxiety mounts, she is beginning to ask different questions, like, “Whom would I go to on an investment-banking deal?” This advisor has had the comfort of knowing exactly who to call at her present firm for an immediate response and the prospect of losing that certainty is what is causing her the most distress.

How can an advisor who is seeking to change firms be proactive about maximizing the on-boarding process? He should ask to have an on-boarding coach assigned to him as part of his transition package. If the potential new firm does not have a formal on-boarding program (as most don't), then the candidate should seek to have the firm assist him in tailoring a customized on-boarding protocol. Not only would this be in the best interest of the broker, it would also show the firm that he is serious about making the transition a successful one.

What does on-boarding accomplish?

If brokerage firms were to make on-boarding programs available (either in-house or outsourced) there would be several key benefits immediately realized by all concerned:

  1. It would be a key differentiating factor in the mind of a potential recruit. The fact that the new firm would assign a coach to him would let a recruit know that the firm is not only interested in him because of his assets under management and trailing 12, but also that it cares about his psychological well-being and successful cultural assimilation.

  2. There is so much on the plate of branch managers today because of increased compliance monitoring, focus on revenue growth and recruiting that it is virtually impossible for a branch manager to adequately prepare for the psychological assimilation that a recruit will need to make. A designated on-boarding coach would free up the manager's time so that he could continue successful recruiting as well as focus on other vital functions.

  3. Successful on-boarding brings out the best a recruit has to offer and allows him to become maximally productive much sooner. When someone feels that his psychological needs are being met, he is able to focus more on production than on nonrevenue-producing issues. Certainly, in the financial-services world, this could translate into an enormous win.

On-boarding should start during the recruitment process. Some good initial planning and focus on the part of a manager prior to the first contact with the financial advisor he is meeting will go a long way in the eyes of that advisor. Then, once the offer has been extended and accepted, the on-boarding process kicks off. The firm's transition team should be positioned to assist the advisor with the technical and legal aspects of the move. The first 100 days of the broker's tenure with the new firm are the most critical to properly ensure the effective transition from old firm to new. A mentor should be appointed to make the candidate feel engaged in the new organization.

The exact scope and nature of the on-boarding plan is something that should be discussed and planned by all of the individuals who are involved in the advisor transition. Expectations should be established, written goals set forth and meeting schedules for the period planned.

Remember, the goal here is to get the advisor recruit up and running as quickly and profitably as possible. The relatively small investment made in the on-boarding process, when compared to the cost involved in hiring and transitioning an experienced financial advisor to a new firm, is money that is well spent and will yield great rewards for all concerned.

Writer's BIO: Mindy Diamond founded Chester, N.J.-based Diamond Consultants, which specializes in retail brokerage and banking recruiting www.diamondrecruiter.com

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