There was a time, not too long ago, when for many a tenured financial advisor, graduating to a branch-manager position was the ultimate aspiration. It was seen as an honor, a natural progression in a successful career. After all, branch office managers spent most of their time guiding, inspiring and overseeing other advisors — basically, taking care of the troops.
For many advisors, that aspiration remains the same. But the job has changed. In today's hyper-vigilant compliance environment, many branch managers — whether at small independent b/ds or giant Wall Street wirehouses — find themselves acting as paper pushers and traffic cops. Fulfilling firms' and regulators' demanding compliance requirements has taken a front seat, as has meeting aggressive revenue growth and recruiting targets.
Many branch managers are finding it difficult to balance all of these demands. “There was a time where I spent maybe 15 minutes a day on compliance-related issues,” says Brad, a West Coast wirehouse branch manager. “Fast forward a few years, and now I am spending many hours on a daily basis making sure that my office is compliant. Even though my office has had only two customer complaints in the last four-and-a-half years (both of which were settled for nominal amounts), I really feel bogged down and unable to focus as much time as I would like on helping my brokers build their businesses.”
For some branch managers, especially those without their own books of business, the most striking problem is the lack of job security. This is the case even for very successful and long-tenured branch managers. Take Vince, a large-city manager in a high-visibility branch for one of the major firms, who was recently terminated for “failure to supervise.” Vince had been a producer for many years before he gave up his book and went into the firm's management program. He quickly moved up the ladder to manage more and more prestigious offices. Vince was an outstanding recruiter, bringing in hundreds of millions of dollars in new assets a year, and hiring some of the top producers in his market.
Despite his outstanding performance, he was fired over a single non-compliant broker who signed off on a trade without obtaining client approval. Vince no longer has a book of business, his compliance record is marred and the market is flooded with non-producing management candidates, many of whom have clean compliance records and were earning less than Vince did.
In today's turbulent markets, it might seem like a relief to give up a book of business and graduate to management. Take Scott, an advisor who has worked at three firms during his 15-year career, and produces annual revenue of $700,000 on $80 million in assets. Feeling “burnt out” by the current market, he was considering becoming a branch manager. Scott, who is 42 and works in a Midwest wirehouse branch, said he wanted more intellectual stimulation, and believed he would enjoy mentoring other advisors.
He was aware of certain drawbacks. For one thing, non-producing branch- management positions for small branches don't pay a lot, with salaries in the $75,000 to $125,000 range plus incentive compensation — in total much less than what he was earning as a financial advisor. But it was the prospect of spending long hours early in the morning and late in the evening to meet with potential recruits — so that he could meet aggressive recruiting goals — that ultimately turned him off. (He has two young kids.)
That said, there are some appealing opportunities out there. In the race for top talent, some firms are offering producing management positions in smaller offices to exceptional advisor recruits — without the hassles of compliance or recruiting work. In these arrangements, the firms expect an advisor to bring over his book of business, while compliance and recruiting work are handled at the district level. If you've always dreamed of being a branch manager, this kind of arrangement might be a perfect fit.
Writer's BIO: Mindy Diamond
founded Chester, N.J.-based Diamond Consultants, which specializes in retail brokerage and banking recruiting.