2-Model Solution for Indep. BD's to Grow Minority & New Advisor Recruits
Independent BD's Inherent Structural Problem Preventing Bringing in People New to Advisory Business - We hear all the time about how more advisors are retiring/dying than are being added, and how there aren't enough new advisors of color. A friend in the industry nicely told me yesterday that independent BD's margins are too tight to invest in unlicensed and unproven advisor candidates, no matter their color, sexual orientation, or religion. He said how wirehouses and insurance-based advisory businesses are better at bringing minority advisors into the industry because of their much better margins.
Why Not Have Two Payout Models for Independent BD's?! - I'm only suggesting this for the independent BD leaders who want to increase the number of advisors, especially minority ones, into the industry. This wirehouse-level payout could be for a 3-5-year "training/building" period for each new advisor, and is clearly financially sound for the BD and logical for the person wanting to become a financial advisor. Existing advisors would be more willing to take on unlicensed and unproven people into their businesses if they had backup help from the home office - or outside consultant - and had an opportunity to make more money for taking a chance on that person. Successful new advisors can be given a chance to buy out their 3-5-year lower fee commitment. And those who leave for another firm before the end of that commitment would owe a prorated amount of the otherwise forgivable "startup capital" invested in them.
Use Reach, Creativity, and Tenacity of Independent Recruiters - Give a $3,000 to $5,000 fee to recruiters who bring in unlicensed and unproven candidates who pass their first securities exam. It won't make any recruiter rich, but it will give some incentive to help the unlicensed and unproven candidates they frequently come upon.
Michael Sakraida is the founder of the Financial Advisor Network (FAN). FAN, with over 17,000 screened advisor and home office members, is committed to helping advisors and their affiliated firms make more money with less work and more fulfillment with ideas, introductions, and career help. email Mike at [email protected] to schedule an exploratory talk on this or any other matter related to being more successful and/or more fulfilled.