Despite ever-increasing compliance issues, recruiting remains the most important focus of any branch manager's job. "It's typically the biggest component of his year-end bonus, job assessment and his firm's determination of whether or not to keep him," says Mindy Diamond, president and founder of Chester, N.J.-based Diamond Consultants, which specializes in retail brokerage and banking recruiting.
As part of the firm's continued restructuring efforts, Morgan Stanley recently fired 30 BOMs. "I'll bet that in just about every case," Diamond asserts, "these jobs were lost due to poor recruiting performance."
And, while it would seem that working in a large, broker-rich metropolitan area would make this critical task a bit easier, the opposite actually appears to be true. "Though an area like New York City has a lot more brokers than Tuscaloosa, Ala.," Diamond says, "I'd rather recruit in Tuscaloosa any day."
As director of RBC Dain Rauscher's Florham Park, N.J., complex, Dan Alesandro oversees a total of five branch offices and some 75 registered reps. He not only recruits for his own branch, which has 46 reps (Alesandro doesn't produce), but the 20-year veteran branch manager advises four other BOMs on recruiting techniques since becoming complex director two years ago.
Like Diamond, he thinks recruiting in larger markets like his (Florham Park is less than 15 miles from midtown Manhattan) is more difficult. "A good candidate for us may well be interviewing with three or four other firms," he says, "while in a smaller market they may only have one or two firms to look at." Branches in larger markets also have more seats to fill and higher turnover rates, he notes. What's more, he says, "The deals are larger, the candidates' production is larger -- that makes this an extremely competitive recruiting landscape."
Stan Webb, director of Dain's Spokane, Wash., office, also agrees. Webb, who oversees less than a dozen reps, was named RBC Dain Rauscher's "Branch Director of the Year for 2005." Among Dain's 145 branch offices in 40 states, Webb's branch ranks No. 1 in productivity per financial consultant. Over the last four years, he has more than doubled branch profits.
"In a big market, you do have a bigger potential pool of recruits," says Webb, who has been a producing manager of the Spokane branch for 10 years. "But, getting to know your prospects is a big part of your ultimate success. And, that's the advantage you have in smaller markets." Everyone in his branch lives in the Spokane metropolitan area (population: about 197,000) and is involved in his community. "I knew everyone I recruited over the last five years on a personal basis first, and knew they'd be a great fit for this office."
Webb, who played minor-league baseball for the Washington State Cougars before entering the securities industry, doesn't hire independent recruiters because he says he has no need. Webb says he's recruited two new reps for each of the last four years to replace those who've either retired or left the business, but stresses, "It's not just about high production. I also look for potential. Someone can be new to the business but, if I think he'll be as good or better than our average person, I'll hire him."
Webb tries to hire reps with similar profiles; he says it helps the office run more smoothly. "My reps all have similar production levels. They range in age from their late 30s to mid-40s and have kids around the same age. They all have community ties, which helps me with the recruiting process as well."
The bottom line, says Webb: "Since this is a small market, I don't need to simply put a body in a chair. I've tried able to create a desirable work atmosphere by being very selective in the recruiting process. We've built a good label in the community. So, just as I know my potential recruits from the community, they know the reputation of our office."
So, how do larger market BOMs compete in the recruiting process? High-net-worth clients in these areas typically want a wide menu of investment products and services, Alesandro says. "Offering things like banking services becomes almost a necessity -- and a great leverage tool when looking to recruit top brokers," he says,
He tries to lure quality reps who work in Manhattan but live in New Jersey with the prospect of a better quality of life. "I meet with them and say, 'How would you like to be closer to home?' "
Managers in larger markets are not only competing with BOMs from other firms, Diamond notes, but from their own as well. "I just had a broker decide to move to a certain New York City wirehouse. The firm's midtown BOM did a fabulous job of courting him. But, he lives in Westchester and commutes via Grand Central Station. So, he's interviewing with the manager of a branch right there. He wants any easy commute and he has that option."
Another important tool that's helped make Alesandro successful has been selecting two or three excellent outside recruiters whom he trusts and feels understand him. "I make myself available to them for breakfast, lunch and dinner," he says. "But I require a commitment from them, too. I insist they only bring me quality candidates who fit the profile I've given them. I don't want to go out on calls that waste my time or that of the person I'm interviewing."
Alesandro gives them comprehensive recruiting packages to review and he tests them periodically. "I want to be sure they remember me -- and what I'm looking for -- and that they don't get me confused with someone from UBS or Smith Barney." That also makes them more than recruiters, he says. "They become good sources of information for candidates wanting to know more about your organization."
Finally, he stresses that BOMs in large markets shouldn't view recruiting as a once-in-a-while thing. "I feel you've got to do something aimed at recruiting every day, whether it's being out in the community at a social event, getting on the phone and cold-calling, following up with candidates you may have spoken to a year ago and booking meetings with new ones."