Retention (Part Two)

Retention in the Broker World — The Glue That Binds (Pt 2 of 2)

Part 2 – The Basic Fundamentals –

In Part 1 of “Retention” I dealt with the importance of retaining assets (aka Advisors) during a merger or in the normal recruiting process. But, far more important is how a firm conducts and manages its retention policy on a consistent basis. Let’s consider the following:

A) Branch Manager’s Job Description

Let’s see now – Revenue and asset growth, recruiting, reciprocal (a la the banks), fee-based/recurring business, cost control, compliance control – where the hell is retention? In a lot of cases (and I do mean a lot) it’s not there. Whatever senior management demands from the branch manager will flow straight to the sales force; if it’s all one way then sooner or later the IA’s are going to asking “where’s the beef”?

B) Broker’s Report Card

While the ‘suits’ will inevitably have excuses ready for a poor showing in the annual show and tell piece from Investment Executive Newspaper they often will pooh-pooh the results as being over-stated and without a lot of merit. But, having been a ‘suit’ for many years I can assure you that there is a fear factor present in middle management as they anticipate the score card because they know that senior management also read Investment Executive. The Report Card carries a clear “retention” message but, it’s only a once a year thing.

C) Delivering

Whether it’s on vision or promises the firm and its managers will be judged on their ability to deliver a working atmosphere of trust and reliability within and for the sales force. As mentioned in my earlier blog, brokers do move for a variety of reasons but none is more damaging than a lack of respect for management which does not deliver on the stated goals it has set. Reputation will always be a killer or a savior in the retention process.

D) Recognition

Years ago when John Rothwell and I were fortunate to be in charge of the sales force at Midland/ Walwyn we regularly acknowledged superior performance and achievement in asset accumulation. But more often we, along with our regional managers would make sure that public recognition for simply a job well done was part of our retention regimen. Unfortunately, few senior managers in our business understand how truly important that kind of recognition is to advisors.

E) Relationships

I’ve always said that a branch manager walks a very fine line in his/her working relationship with the sales force as well as the support staff. Woebetide the manager who slips into a “buddy” relationship with the advisors, because the day will invariably arrive when she/he will have to step out of that role and make some tough decisions. On the other hand the manager who employs empathy (not sympathy) to an advisor’s business difficulties or plights at home will score big points on the retention format.

F) Advice

Again going back to the days at Midland /Walwyn we were the first firm to actively seek out advice from the field in the form of an advisors’ council to management (A.C.T.M). Truly, A.C.T.M. at times tested the nerves of middle and upper management but, overall, it helped build a healthy understanding and respect for all parties. And frequently, the advice that came from the field found its way into major strategic decisions.

G) Training

This hopefully is a given within a company that is hiring new brokers. Often overlooked or forgotten in many firms is on-going training for mid-level to senior brokers and their teams. In the long run this process is much more valuable in retention practices than short term dollars. Getting advisors and managers involved in strategic practice management programs helps build in an appreciative loyalty factor that is otherwise hard to come by.

To Conclude

Given the amount of time an advisor spends at the office and/or on the job it is really important to understand the human psychology of being a broker on a daily basis. There is no singular and hard conclusion on how to retain the sales force but, there is little doubt (and lots of historical evidence) that a failure to recognize the need can and will prove very costly to the firm.