The Office Manager: Advisor Advocate or Company Man?

The Office Manager: Advisor Advocate or Company Man?

Branch office managers used to be the superstar plucked from the ranks and paid big bucks to guide other reps to similar success. How has that changed?

Office managers once were superstar advisors plucked from the ranks and offered big bucks to guide other reps to similar heights of success. Advisors looked up to them. They were motivators, confidantes, hand-holders and advocates. If their brokers succeeded, mangers would reap some of the financial rewards.

But regulatory scandals, a market collapse and a seemingly endless slew of mergers and consolidation changed all of that. Today’s office manager is, first and foremost, a representative of the brokerage firm. He makes far less money than he once did and lacks the influence to get things done on his advisors’ behalf. Many oversee large groups of offices, or complexes, meaning less time with advisors. Regulatory issues take more and more of their time. It’s not the career path it once was.

We asked industry insiders what the greatest complaints were about today’s version of the branch office manager.

  • Less Coaching Time: Prior to the wave of consolidations, wirehouse branches had twenty advisors on average, says Andre Cappon, head of consultancy the CBM Group. Now a manager will typically oversee far more reps. Among other things, that limits the time managers can help groom younger advisors, part of the reason only one in four newbies make it to their fourth year.

An advisor in Manhattan branch suggests pairing young reps with experienced veterans. “If a manager can no longer spend a lot of time mentoring new advisors, he should try and hook them up with senior reps who can. You certainly can’t force ‘partnerships.’ But managers are in the best position to know which of their reps best complement one another.” 

“For every newbie who needs guidance, there’s almost always a veteran who could use help with things like research, paperwork, and prepping for client meetings,” he continues. “And, if a permanent partnership should result, that makes succession planning for the senior advisor much easier.”

  • Diminished Power: From the advisors’ perspective, today’s office manager has to be a “company man and a compliance hound” in order to keep the job, says Cappon.

In other words, the notion of an office manager being part of a team of advisors in an “us versus them” mentality towards the corporate office is falling away, says Chip Roame, head of Tiburon Strategic Advisors. “Today, the job can be viewed as part of a bigger corporate career path and not just a promotion for the best sales guy.”

That’s largely because the incentives have changed. Office managers used to get an override on brokers’ production that could push their earnings beyond $500,000 a year, Cappon says, ensuring they would do what was needed to help the broker. “Now they get bonuses which are far less substantial, and they pretty much have to do what their firms tell them.”

“Upper management has stripped office managers of much of their power over the last several years,” concedes another wirehouse advisor in New York who requested anonymity. “If, for example, we wanted to get a client fee waived, it used to be that the manager would just snap his fingers and it was done. Now, he has to go through several layers of management and a lot of red tape.”

  • More of a Recruiter: Since the industry pushes recruiting so hard, that’s where a lot of managers put most of their focus, Cappon says. “That usually means a lot less attention is paid to existing reps.”

The result is that office managers who are considered the best recruiters also often have the worst retention records, according to a wirehouse advisor in New York.

Other advisors warn about recruits being charmed by a complex director only to find they report to a local manager with less latitude. “I think every effort should be made to incorporate local office managers into recruiting meetings.”

Recruiter Rick Peterson estimates there are some 3,500 to 4,000 offices among the 60 or 70 mainstream brokerage firms today, down “substantially” from even six months ago. There is disagreement on whether that’s an inexorable trend.

“I think the emphasis firms place on the role of the branch manager may be cyclical,” says Glenn Fischer, a former Smith Barney office manager who now heads New York Wealth Management. “Merrill Lynch went to Regional Operations Centers in 1985 but I think it only lasted about a year before they changed back. And, complexes are nothing new. I saw them in the 80’s after the crash and again now. It’s enabled firms to save a couple of office managers’ salaries, but the results haven’t always been worth it. This is a business of personal relationships. And it’s hard to have them if you’re overseeing too many people.”

“I think senior management will once again see the need for a good leader in any sizable branch,” he says. “Hopefully, we’ll start to see it happen in the next couple of years.”