The U.S. is experiencing its worst period of unemployment since World War II, with over 8 million people out of work. The securities industry has been devastated, with nearly a half million workers losing employment over the past two years. It's not letting up, either: 7,000 securities industry jobs disappeared in January alone, according to online job board Brokerhunter.
Meanwhile, the explosion of online social networking and industry-specific job websites over the past half decade means there are more people hunting for employment and for employees on the Internet than ever before.
The securities industry is no exception. In fact, online job board postings by and for “financial advisors” have been taking off recently. eFinancialCareers, a financial services industry job board, saw a 22 percent increase in the number of “financial advisors” posting resumes in the second half of 2009 versus the first half. Brokerhunter.com, a widely respected securities industry job site, says 8,878 resumes were posted over the last six months, of which 28 percent advertised individuals looking for FA positions. The site gets over 200,000 visitors per month.
New job boards have also entered the wealth management space recently. Dow Jones launched FINS.com over the summer. And in August, Skiddy von Stede, a financial services recruiter, rolled out OneWire, which has 50,000 users. Von Stede says he designed the site to function like the eHarmony of online job boards; instead of just uploading a resume, the site collects detailed, searchable information about the job candidate's background, while employers are charged $15,000 per year for unlimited access to profiles on the site.
Despite all of this online activity, accomplished financial advisors do not go online to job hunt. Those with a few years of experience and a decent sized book of clients tend to get inundated with calls from third-party recruiters, known as “shoulder tappers” in the industry, on a daily if not weekly basis. As one top-producing advisor from Merrill Lynch put it, “No one who has any decent book of business goes looking for a job online.”
Indeed, the major firms, both national and independent, say that even now, they only use online job boards marginally for trainees, and would never hire an experienced FA online. When it comes to experienced talent, the big firms say they work to build a relationship with a recruit so that by the time they make the hire, they are very confident that person is the right fit.
“Typically what we're seeing is our clients are working their own networks more than they have in the past — looking to staff and turning to previous colleagues,” says Eliza DePardo, of consulting firm FAInsight. DePardo says firms do some online job board searching themselves to avoid expensive recruiting costs, but that for big hires, they are even more reliant on word of mouth than they were three or four years ago.
Many of the big firms have ambitious hiring plans for this year. But at Morgan Stanley Smith Barney, the number one recruiting source, even for trainees, is employee referrals, followed by campus recruiting and then online job boards, says a spokesperson. The firm does not prospect for an experienced FA on an online job board. Merrill Lynch has confirmed it plans to hire 2,000 advisors, mostly trainees, this year, but didn't comment on its strategy. Wells Fargo Advisors also announced it plans on hiring 1,000 advisors and 400 trainees. A Wells Fargo spokesperson says online job boards account for a marginal percentage of Wells' recruiting efforts. Instead they use in house and third party recruiters.
Not The “A” Team
Another reason firms do not love job boards is because of the types of responses they often get. “Job boards are often populated by people who are either out of work, or people who are quite miserable where they are,” says Price Woodward, principal of financial advisor recruiting and hiring at Edward Jones. For example, Woodward says that last year, Jones got job board replies from numerous unemployed individuals like mortgage brokers, real estate agents, bankers, and pharmaceutical reps, who were “quality” people. However, he says the firm found some were less committed to the industry and the firm compared to recruits who came to the firm through an existing employee referral. “It's almost like they're [job board users] looking for a job as opposed to career,” says Woodward. Job board recruits were also at a disadvantage compared to those who came to Edward Jones via referral because there wasn't anyone at the firm who could act as a mentor.
Considering that Edward Jones intentionally recruits professionals who are new to the financial services industry, you might think online job boards like Monster.com and CareerBuilder.com, with their reach across so many industries, would be good outlets for the firm to find trainees. In fact, online job boards make up 35 percent of the firm's recruiting pipeline, while about 50 percent of new hires come through referrals from existing FAs.
Some firms use the job boards selectively, for different divisions. “We've used job boards in the past, but we found something very similar to what you're finding with other firms, which is, the right FA, frankly, doesn't use them,” says Bill Van Law, head of business development at Raymond James Financial Services, the independent arm of Raymond James. In fact, the firm looked into using online job boards again in 2009, says Van Law, expecting to see a different population of potential hires due to the dismal economic environment. But the firm's recruiters came away thinking: They're still not the place to look for experienced advisors. That said, William Roney, executive vice president at Raymond James & Associates, says the employee side of the firm uses online job boards as one method of recruiting trainees. On the other hand, the firm prefers hiring individuals who already have a relationship “established with the firm.”
“The chances of success for someone coming in cold off an online job board, well, that doesn't happen a lot, and they're really flying blind,” Roney says.