Why are you so bad at recruiting?
Russell Hutchinson surveys the market to see who is recruiting advisers - and makes some startling findings.
Monday, May 14th 2012, 7:17AM 
4 Comments
by Russell Hutchinson
A much-admired client at a life insurance company (we'll leave them both nameless) told me recently that ‘the industry' is really bad at recruiting.
Because he's a good friend, we were able to have a frank conversation about why. "It's because you don't try" I said.
"What do you think all these people we have in sales are doing?" he retorted.
I said business development managers only very, very, rarely do any recruitment to the industry. We argued a bit, and then we looked for evidence of recruitment activity, and this is what we found:
Websites: The first five life insurer websites we checked had nothing on them relevant to recruitment of advisers.
One of them has a ‘careers' area, but this actually has nothing to do with proper jobs where you ask a client if they are going to buy something.
Let's be clear, that's not just nothing to try and tempt a person considering financial advice as a career - it was also nothing to tempt a current adviser to inquire further about their offer. Nothing.
Telephone: I stuck the phone on speaker and we tried mystery shopping a company.
"I'd like to talk about becoming an adviser" was followed by all sorts of signs of a lack of organisation, variously; ‘who is your BDM?', ‘hmmm I'll try sales', and ‘you need to be registered you know'.
Business Development Managers: we talked with a couple. ‘We usually refer them to a couple of brokerages that we know are hiring' and ‘we're not geared up to recruit green peas' and variations on the theme.
One manager I have spoken to at a company which mainly distributes through aligned adviser businesses had a clear process.
Dealer Groups: I shifted tack, and checked with several dealer group websites. Still nothing for the aspiring financial adviser.
Later in the week I received a call from an adviser who has been working in the field just two years. When they joined their the industry they said that the position wasn't advertised they approached a person they knew.
The manager of the business had no role description and provided no estimate of the potential rewards. There was no clearly defined list of the steps necessary to qualify and start work.
You would think that the industry has no jobs to offer, yet every insurer and most brokerages that are bigger than one person that I know of all say that they want to recruit. Only one or two act as if they really mean it.
The key components of recruiting activity are: advertise, have a role description, understand the personal characteristics you are looking for, have a presentation that explains the function, and a clear set of steps for the individual to take in order to become an adviser.
Why not do it now - almost nobody else is.
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Comments from our readers
From my experience, this is the life-cycle of an agent:
Join an established firm as a newby. Get limited training, and access to review an existing client base (that shouldn't have too much business in it if the client had been looked after properly anyway). Newby does not get financial support so either leaves, OR goes out on his/her own.
After 6 months of hard work, chasing sales and churning (for a quick buck) many new agents decide it is too hard, so they leave.
SOLUTION – Forget large up-front commissions and build trail commissions. This can fund a new agent on a salary for the first 6 months to build up their own client base and income. Promote an environment where the new agent does not want to leave (good support, income, role models and value).
RESULT: Newby stays. Adviser firm benefits from increased production. New adviser gets all he earns. Clients get better service. Life companies win too.
ANSWER: Stop being so greedy! Treat new advisers as part of the team, and not just a source of income.
The result is that it is up to individual brokerages or dealer groups to do the recruiting. And as has been stated, not many are doing it.
Why are people not recruiting? Well it is expensive and time consuming and there are compliance risks and set up costs and you need bigger premises & support staff and then there is the risk of litigation etc etc etc...
But lets face it, there are always excuses not to take action aren't there!
Well I for one bit the bullet and began recruiting advisers just over a year ago and now have 10 new advisers, 9 of which are brand new.
I also know that Newpark has been actively recruiting new advisers into the industry and providing a significant amount of training and support for those new advisers. They have recruited over 35 brand NEW advisers this year... and that's on top of the general growth of the group.
They provide significant new adviser training courses FREE, and these are always full.
So although most in the industry are not doing anything about increasing our dwindling numbers, it's fair to say some are still committed to supporting and training newbees into this bloody excellent industry.
Paradoxily, forums like Good Returns or Financial Alert etc are not exactly full of encouraging info for a potential or aspiring adviser as the "News" is generally negative. So anyone "browsing" to get some insight on life as an adviser is probably going to run for the hills.
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