WealthManagement Magazine

Your Underpaid Caddy

When it comes to lavishing praise on their sales assistants, reps are generous. They'll often tell you that they couldn't possibly get through the day

When it comes to lavishing praise on their sales assistants, reps are generous. They'll often tell you that they couldn't possibly get through the day — and continue to bring in new assets — without the services of an organized, competent and personable professional to deal with clients, execute orders and handle the avalanche of paperwork that goes with the retail investment business.

“They save us every day,” says Pat Sullivan, managing partner at Morristown Financial in Morristown, N.J. “They absolutely deserve more recognition.”

But there is one form of recognition that many reps stubbornly refuse to provide: a level of compensation that is commensurate with the increased demands of the sales assistant job. Sales assistants, by and large, are no longer phone-answering filing machines. Indeed more than 80 percent have Series 7s. While the rep focuses on building relationships and gathering assets, it is often the sales assistant who tends to the workaday tasks of maintaining healthy client relationships — placing orders, tracking down missing dividend payments, cutting checks and acting as an all-around troubleshooter. Some, though not many, have even taken on substantial investing responsibilities, such as creating asset-allocation models and helping research funds and managers to suggest to clients.

Yet, the way many reps reward sales assistants continues to reflect the old, secretarial reality. Median sales assistant salaries, which are generally paid by the firm, rose by 1.9 percent in 2004 to $34,669, according to the annual survey of sales assistants who subscribe to Registered Rep. But bonuses, which are paid by the reps, actually fell to a median of $5,469 in 2004, from $5,750 in 2003. Median bonuses for assistants with 10 or more years of experience were $6,785 — down from $10,600 in 2000. Median total compensation was $43,240 last year, an 8 percent increase from $40,092 in 2003.

A drop in bonus pay can sometimes be attributed to a dip in overall broker production. But data gleaned from Registered Rep.'s 2005 broker compensation survey showed that wirehouse reps had a stellar year in 2004, boasting an average production of $680,000, a nice jump over 2003's mark of $530,000. While bonuses are typically tied to the advisor's production, 82 percent of the sales assistant respondents say their bonus is not hard-wired — it can be raised at the discretion of the boss, the branch manager or the firm. It just doesn't happen much.

But Happy

For now, assistants are not speaking up. Indeed, most report a high level of job satisfaction (see table, page 40). But there is a dawning recognition among sales assistants that they aren't getting compensated for their increasingly complex work.

“I am doing nearly a full broker's job and earning diddly,” says one sales assistant who participated in the survey. “The firms talk about full service but SAs are the ones giving the service!” Another respondent lamented, “I'm not comfortable with the disparity of income between sales assistants and brokers.” Yet another sales assistant complained about the long hours and lack of appreciation. “Our job descriptions never end. We are required to do whatever they think we should do. We have a huge amount of responsibilities that the broker will never know because they don't want to.”

Brokers and teams that don't pay attention to their grievances might find themselves at risk, headhunters say. “If [reps] don't step up to the plate, someone is going to come along and snag that person,” says Mitch Vigeveno, president and CEO of Turning Point, an executive search firm headquartered in Safety Harbor, Fla.

Investing in these key workers can be a competitive advantage, says Chip Roame, managing principal at Tiburon Strategic Advisors in San Francisco, Calif. “Good sales assistants are underpaid and undervalued,” he says. “Brokers have a tremendous opportunity to leverage sales assistants much more heavily, turning them into parabrokers.” Having that all-star assistant who does everything a broker does — except the truly high-touch tasks — will separate that rep from the herd. The payoff: Advisors can build a bigger practice more easily if they can rely on an expert staff of assistants to do the bulk of the day-to-day work.

Despite the jump in the salaries of the Registered Rep. respondents (who, it should be noted, are not the same individuals every year), Roame maintains that salaries are still not up to snuff. “Paying more for them at a base salary level is critical to recruiting top-tier talent,” he says.

“While it's probably true that compensation is on the rise, it's not going up commensurate to how much work they're doing,” says Ann Boyd, a partner at SA Training. Her Nashville-based consulting firm trains and works with sales assistants at brokerage branches across the country. She says that many of her SA clients are “outpacing their reps” in terms of workload and hours spent in the office handling client-related issues. (Roughly 45 percent of respondents say they work more than 40 hours a week, but only 30 percent say that that they feel overworked. Sixty-two percent say that they do not receive overtime pay; slightly more than 31 percent say they do.

But, Boyd stresses, it is also the increased value of the work that is unrecognized. At this point, Boyd says, many sales assistants are better at determining which products are best suited for certain clients than their bosses. That's because they're more familiar with the client's goals and personal situations and, Boyd says, less motivated by commissions.

Indeed, the survey shows an overwhelming 97 percent say “client management” best describes their job responsibilities, duties that include taking trade orders, helping explain investments to clients and developing investment objectives. Sixty-four percent of the sales assistants polled say clients rely on them for a variety of needs, including some type of advice. Only a paltry 0.8 percent described their primary responsibility as “secretarial work,” like typing, filing and taking messages.

Given that backdrop, firms are looking for more knowledgeable employees to fill these roles. Nearly 81 percent of sales assistants are armed with a Series 7 license, up from 69 percent in 2000. Another 56 percent have earned a Series 63 license, up from 20 percent in 2000. About 24 percent say they've received an insurance license, besting the 2000 mark of just 6 percent. The number of SAs with a college education had declined somewhat over the last five years but has crept up recently. Thirty-five percent of them hold a bachelor's degree while 65 percent of the participants have at least some college experience. Still, half of the respondents say they have an associate's degree, a bachelor's degree or a post-graduate degree, slightly higher than the 46 percent reported last year.

Estimated Median Salary and Bonuses for 2004
Total Compensation Bonus
Experience
20+ years $50,000 $9,772
15 to 19 years 46,000 8,333
10 to 14 years 46,250 6,785
6 to 9 years 43,235 5,536
3 to 5 years 38,249 4,078
Fewer than 3 years 35,000 1,562
Primary job responsibility
Client management $37,142 $7,395
Client service 33,408 4,187
Series 7
Yes $44,591 $6,363
No 36,538 2,285
Type of firm
Wirehouse (more than 2,000 reps) $44,473 $6,397
Regional (200 to 1,999 reps) 41,875 5,312
Type of practice
Fee-based using mutual funds $43,999 $6,874
Commission-based on sale of individual securities 47,777 6,499
Separately managed accounts 45,000 5,417
Mix 42,500 5,700
Region
New England N/A N/A
Mid-Atlantic $42,999 $3,214
East North Central 42,000 6,041
West North Central 48,333 8,999
South Atlantic 45,714 7,221
East South Central N/A N/A
West South Central 38,999 5,000
Mountain N/A N/A
Pacific 47,500 4,832
Involvement in rep goals/strategies
Not involved or aware $40,000 $3,000
Aware but not involved in their development 42,250 4,499
Provide some input 44,062 6,710
Integral part of strategy development 47,500 6,874
Source: Primedia Business Magazines & Media Marketing Research

“The job is becoming more sophisticated and complex,” says David Tufts, a managing director at Oppenheimer & Co. in New York. “The biggest change has been the ability to handle asset management,” he says. For example, an assistant today might be called upon to choreograph the setup and management of a $5 million portfolio with eight different money managers. That requires wiring funds and transferring existing assets to managers and the regular rebalancing of the portfolio to prevent style drift. In addition, there are more phone calls, more trades and more paperwork, because brokers need more clients to run a lucrative business as fees and commissions have come down.

Age
Respondents Percentage
Under 25 16 4.1%
25-29 47 12.0
30-34 57 14.5
35-39 65 16.6
40-44 62 15.8
45-49 53 13.5
50-54 38 9.7
55-59 27 6.9
60 or over 16 4.1
No answer 11 2.8
Mean Age: 40
Years of Experience
Respondents Percentage
Less than three years 38 9.7%
3 to 5 years 91 23.2
6 to 9 years 83 21.2
10 to 14 years 68 17.3
15 to 19 years 41 10.5
20+ years 68 17.3
No answer 3 0.8
Median years of experience: 9 years
Goals
Respondents Percentage
I'm happy where I am 95 24.2%
Registered sales assistant 13 3.3
Sales assistant to broker team 19 4.8
Office manager 32 8.2
Junior broker 52 13.3
Paraplanner 20 5.1
Broker 45 11.5
Other 31 7.9
I plan to leave the brokerage field 25 6.4
No answer 60 15.3
Source: Primedia Business Magazines & Media Marketing Research

Not Just a Job…

Not surprisingly, the sales assistant job has also changed from a short-term job to a career path. The median length of employment in the 2005 survey was nine years, up from six years in 2002. And sales assistants feel their jobs put them in a position of influence and responsibility. Nearly 70 percent say they provide at least some input into the business strategies and goals of the advisor's practice. Three-quarters say the advisor for whom they work trusts them to complete their duties without close supervision and allows them to take the initiative and assume new responsibilities.

Sales assistants have also taken on a key role in helping financial firms cope with new regulatory requirements. Anti-money laundering measures and more stringent disclosure requirements have added mountainous layers of paperwork. “They do the bulk of the compliance work,” says Jim Vanderwalle, a producing manager at a Legg Mason branch in Long Island, NY.

Thirty-nine percent of the sales assistants surveyed say they perform compliance duties for the advisor. Within that universe, the average sales assistant spends three hours a day handling compliance assignments. Fifty-six percent say that they did more compliance-related work in 2004 than they performed the previous year. As a small representative example of the heavier workload, Vanderwalle cited the amended version of the “syndicate ticket” forms that require checking 20 boxes before an individual trade order can be processed. That not only eats up more of the clock but also creates a greater margin for error.

“Everything has to be run by compliance,” says one sales assistant in Boca Raton, Fla. She describes her job as being “very compliance oriented” and “paper intensive.” Trusts, for example, have to be read front to back, she says, and accuracy is more important than ever.

Dude, Where's My Bonus?

So, if the sales assistants are universally regarded as essential players in successful financial-advisory practice, why don't they get a bigger slice of the pie? Partly, it's because, well, sales assistants in general haven't pushed for it.

Another reason for the lean paychecks is that firms aren't spending the money on training that would educate sales assistants and put them in a position to demand more money. The survey shows that only 6.1 percent of the sales assistants polled received formal, structured training designed specifically for their job. And only 12 percent say they received some informal training from the broker or branch manager. Nearly 70 percent of the respondents say they either learned everything on their own or picked up pointers from other sales assistants.

Others say it's because advisors are too stubborn to invest in a quality sales assistant. Katherine Vessenes, president of Minneapolis-based Vestment Advisors, and author of Building Your Multimillion-Dollar Practice (Dearborn Trade, 2005), recalls an advisor who was earning $300,000 a year and seeing six clients a week. She advised him to double that output by hiring a sales assistant at $28,000 per year, but the advisor refused. “He was too cheap to take the plunge, and it has really limited his practice,” she says.

Boyd tells her clients to negotiate with the advisor over the terms of their bonuses; she recommends tying it directly to the revenue the broker generates, with increases in percentage over time. That way, the sales assistant will work hard to achieve that level of production. Many sales assistants, however, lack the confidence to speak up to reps about their bonuses because they know it's coming straight out of the rep's pocket, she says. Nevertheless, it's an important conversation to have with the advisor. If the goals and the rewards for achieving those goals are clearly spelled out, the interests of both the advisor and the assistant dovetail.

“Rapport is crucial,” says Barry Mendelson, founder and managing director of Capital Market Consultants, Milwaukee. “It's important that assistants have the confidence of the advisor, that they know their role and what is expected of them.”

Some brokers bemoan the fact that they have to pay the sales assistant at all, despite the fact that their firms encourage the practice. “It's like the baby kicking back to the babysitter,” says one producing branch manager in the Northeast. Sales assistants, he argues, are overhead costs that should be completely absorbed by the firm.

Meanwhile, some reps are seeking to force firms to cough up more money for SAs. Class-action suits filed by brokers not receiving overtime pay from their firms are sprouting up in New York and California. Among the grievances listed in a case against Merrill Lynch was that the brokerage titan routinely deducted “numerous charges from their commissioned brokers including monies to pay administrative assistants and support staff,” according to the complaint.

But sales assistants shouldn't lose heart. There are great SA jobs out there for those who “take charge of their career,” Boyd says. The SAs who adopt a more entrepreneurial approach and become knowledgeable about the business are likely to be more successful. She notes that the level of compensation largely depends on the assistant's role within the firm. For example, if the job has more of a sales slant to it, the assistant is likely to be on the upper end of the pay scale.

The key to making the relationship with the advisor work is having an open line of communication. Boyd, who is in the process of creating a trade organization for sales assistants, urges SAs to be more assertive in telling the advisor what they expect in return for their work. Further, they should urge the advisor to put in writing their goals and incentives for achieving them. For their part, SAs should keep track of those milestones and document them for their advisors. That type of dialogue will ensure that SAs are happy with their role and on board with advisors seeking to take their business to the next plateau.

In short, reps and SAs getting on the same page and sharing in the fruits of their labor is a recipe for success. “A broker cannot grow a large asset-management business without competent, detail-oriented assistants,” Tufts says. So while it's nice to get a pat on the back from the boss, the stark reality is that nothing says, “keep up the good work” like a bigger paycheck.

What's Your Bonus Based On?
Respondents Percentage
FA's production 188 48.0%
Achievement of preset goals 83 21.2
The discretion of the FA 177 45.2
The discretion of the firm 100 25.5
Other 22 5.6
Do not receive a bonus 27 6.9
No answer 21 5.4
Total Compensation
Respondents Percentage
Less than $20,000 3 0.8%
$20,000 to $24,999 15 3.8
$25,000 to $29,999 23 5.9
$30,000 to $34,999 39 9.9
$35,000 to $39,999 69 17.6
$40,000 to $44,999 54 13.8
$45,000 to $49,999 53 13.5
$50,000 to $59,999 42 10.7
$60,000 to $69,999 34 8.7
$70,000 to $79,999 18 4.6
$80,000 to $89,999 2 0.2
$90,000 to $99,999 9 2.3
$100,000 or more 6 1.5
No answer 25 6.4
Median compensation: $43,240
Total Bonus
Respondents Percentage
None 32 8.2%
$1 to $999 30 7.7%
$1,000 to $2,499 53 13.5%
$2,500 to $4,999 63 16.1%
$5,000 to $9,999 48 12.2%
$10,000 to $14,999 29 7.4%
$15,000 to $19,999 50 12.8%
$20,000 to $24,999 22 5.6%
$25,000 or more 26 6.6%
Source: Primedia Business Magazines & Media Marketing Research

HOW THE SURVEY WAS CONDUCTED: In July 2005, Primedia Business Magazines & Media Marketing Research emailed 1,614 Registered Rep. subscribers. Specifically selected were subscribers indicating a job function of Sales Assistant. The survey's effective response rate was 26.9%

Outstanding Sales Assistants 2005

Well Armed: Jodi Sherman
Merrill Lynch

The brokerage industry is overflowing with sales assistants who go above and beyond to keep their practices running smoothly. Here are profiles of five such assistants.

As a sales assistant, Jodi Sherman knocks the cover off the ball. Sherman, 27, is the client associate for a two-broker team at Merrill Lynch that generates $1.8 million in revenue out of its South Park, N.C., branch. Although she has only two years on the job, she has made an indelible impact on their practice.

Previously unregistered, she successfully sat for the Series 7, 66 and insurance licenses within her first year at Merrill. And, her rapport with clients is to be commended, as she has proven to be the consummate relationship-builder for the firm, advisors who work with her say.

Clients are continually providing unsolicited, positive feedback about their experiences with her, and her co-workers say she has a natural charisma that folks find endearing, and her unbridled enthusiasm is contagious.

But Sherman's value goes well beyond keeping clients happy. She's also savvy at handling any operational issues that arise, having minored in computer information systems at Bentley College in Boston. Recently, she coordinated the conversion of new wealth management software to 85 users in the South Park office. This was no small task, requiring Sherman to work through the night on a Friday to monitor the conversion process. Her gritty performance earned her the nickname “Mighty Mouse.”

Outside of work, she plays softball for four different teams, often playing back-to-back games in one night. A standout pitcher at Bentley, Sherman now prowls centerfield, robbing opponents of extra base hits and gunning down base runners. She doubles as a track star, running charity races to benefit research efforts to cure breast cancer and multiple sclerosis.

Whether she's in the field or in the office, Sherman is the ultimate team player, according to advisors Gary Labrosse and Britt Byerley.

“Her positive attitude, knowledge and determination to get the job done and her respect for each and every one of her peers has gained her the tremendous respect and support of all of us,” they wrote in her nomination letter.
Kevin Burke

Timekeeper: Denise Koran-Klisiewicz
Merrill Lynch

Spend enough time with Denise Koran-Klisiewicz and you're likely to feel inadequate or lazy, or both.

As the lead client associate for the Tarantino Group, a $300 million-plus team of three financial advisors in Springfield, Mass., and the senior client associate among nine in the branch, a lot is expected of Klisiewicz. With her Series 63, 66 and 7 licenses, she handles the bulk of the trades for her group. She's responsible for all client administration — whether it's setting up client meetings, online accounts or fielding questions about account statements.

“As the senior CA I'm also responsible for the daily functionality of the team,” she says, which often includes reminding busy advisors to complete certain tasks. “I'm a pretty organized person, so not a whole lot slips through the cracks.”

And that includes time. In addition to her 40-plus hour work week, the 39-year-old Klisiewicz spends an additional 10 to 16 hours on her parents' 200 acre farm, called Koran's Farm, in Monson, Mass. (Klisiewicz and her husband Don live next door to the farm, which is located about 25 miles from Springfield.) Somewhere in between farm work and paperwork Klisiewicz finds time to teach knitting classes at the local library.

Obviously, Klisiewicz's ability to multitask is not in question. Indeed, it's probably why she serves as the representative of 31 other client associates in Merrill's Client Associate Advisory Council to Management. “I'm essentially the liaison between the CAs in this complex and management,” she says.

What does she like most about the job? “I like the interaction between client, FA and management,” she says. “I especially enjoy finding solutions to problems.”
John Churchill

Midnight Oiler: Levon Reposa
Morgan Stanley

After two decades working with sales assistant Levon Reposa, Mike Marchi has just one major complaint about the woman he calls the “ultimate employee”: He can't get her to take a day off.

Marchi, founder of the Marchi Group, a six-advisor Morgan Stanley practice based in Concord, Calif., is probably kidding about this, even as he marvels at Reposa's work ethic. It is, in fact, important that she spend long hours in the office, since many clients ask for her when they call.

With a high-school diploma, 40 years in the financial services business, “some college courses” and a Series 7 license, the 58 year-old Reposa says she can pretty much handle anything that's thrown her way. She passes on the chance to be specific about how many hours she works, and the Marchi Group advisors say this is in keeping with the Reposa they know — a selfless, caring and tremendously humble co-worker.

Whether it's entering trades, handling estate changes, answering client account queries or just client hand-holding, Levon has got it covered. And, according to her team, she has never slowed down. “Attempting to list her actual responsibilities throughout the years would be impossible,” her co-workers wrote in her nomination letter to Registered Rep.

Levon, a native of the Bay area, got her start 40 years ago as a cashier for Household International, a consumer lending company. She quickly climbed the ladder there, graduating from a management-training program to become a branch manager. But she soon went looking for a new challenge — which brought her to Morgan Stanley, where she hooked up with Marchi.

The Marchi Group advisors are hoping that their time with Reposa so far is just a warm-up. They even joke that she'll be in a wheelchair long before she quits. And that's just fine with them.
John Churchill

Most Valuable Player: Barbara Hogan
Ryan Beck

Barbara Hogan keeps her financial advisor in business. Literally.

Without her, Ryan Beck advisor Marvin Welsch says he would retire. After all, they've been working together for 25 years. Over the years, Hogan says she has learned to anticipate his needs. That means she can sometimes resolve less complicated client problems on her own. “But I always consult Marvin on everything,” she emphasizes.

The financial planning business is in Hogan's blood. Her father, Robert Sims, was a founding president of the Delaware Valley chapter of the International Association of Financial Planners (now the Financial Planning Association) in 1975. “Growing up, I saw that service and dedication reaps rewards, and witnessed the importance of understanding clients' needs,” she says.

Welsch runs a general financial consultancy practice, made up mostly of individuals, as well as some 401(k) plans. He primarily invests in individual securities, mutual funds, annuities and unit trusts. Hogan says she spends most of her time in the office gathering investment research, but she does everything from preparing monthly client meetings, doing portfolio analysis prep and filling out paperwork, to buying and selling securities. Sometimes she works long hours — in one case pulling an all-nighter to get everything prepared for Welsch before she left on a trip. That didn't faze her.

“This is the only business I know, and I love it.”
Kristen French

Crisis Manager: Beth Foti
SunTrust

Beth Foti has a knack for “being there” when she is most needed.

Foti, who is a sales assistant to two financial advisors with solo practices — Lynn Freshwater and Bryan Roberts — has kept business running and clients happy through a series of recent crises.

Last August and September, as three successive hurricanes — Charlie, Francis and Gene — ravaged Florida, Foti made herself fully available to clients — despite her concern about her own property.

Foti, who has Series 7, Series 66, health insurance and variable annuities licenses, works out of Freshwater's office in Winter Park, Fla., and contacts Roberts and his clients over the phone. She deals especially well with retiree clients, says Freshwater, which make up 60 percent of her practice.

“I feel that kind of practice takes a lot of hand-holding, and she's very good at the hand-holding part,” Freshwater says.

“She is proactive in letting our clients know about new products and services, and is definitely increasing our business,” adds Roberts.

Freshwater and Roberts have around 500 clients each; Roberts manages around $40 million in client assets.

“My biggest responsibility is our clients,” says Foti. “Making sure that all their needs are met, all their phone calls are returned, that they are completely satisfied with their time at SunTrust and with Lynn Freshwater and Bryan Roberts.”
Kristen French

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