Going after bigger players takes innovation, and Securities America, like the bulk of the independent firms, hasn't shied away from the demands of the successful business people they're recruiting. To bring on San Diego-based planner Raymond J. Luccia, author of Buckets of Money (Braintrust Publishing) and a nationally syndicated weekly radio host, Flint promised to help him create a national network of planners. Luccia wanted planners who could respond to local radio callers' questions and convert them to clients. So far, the company has helped Luccia find three seasoned CFP-certified planners in Alabama and Louisiana who are willing to share revenues, something he could never have done at a wirehouse.
"Luccia needed recruitment, structure and distribution for a national network, so we gave him a firm commitment and are helping him roll out the program," Flint says. "We just brought on another large firm, and the deciding factor for them was our branch expansion network. They want a broker-dealer that can support their aggressive growth plans."
To help qualified firms grow, shops are assigned a dedicated company recruiter and are profiled in a national database. Securities America also helps them create a recruiting brochure and subsidizes their advertising. The program, which was rolled out in early summer, has placed 10 reps and has 30 more in the pipeline, Flint says.
AIG Advisor Group has been doing some innovation of its own to attract planners to the six independent broker-dealers that operate under its umbrella. "We recruited over 1,200 people last year for a total of 9,000 reps," says David Fischer, the firm's national recruiting director, based in San Diego.
Compared with last year, the firm has doubled the number of reps it is signing from wirehouses and regional stock brokerage firms and is still seeing many reps come from insurance-affiliated broker-dealers, Fisher says. But it is also getting choosier. The minimum production for setting up a branch is now $250,000.
To help excite those folks who need a little extra enticement, AIG rolled out a Transition Suite in San Diego, with plans to open a second one in New York City later this year. "It's easy to convince people we're the model and company they want to work with, but actually getting them to take the next step, leasing office space and setting up staff, is a high hurdle," Fischer says. To ease that transition, AIG created an office suite in San Diego that allows reps to begin building their business over a 12-month period without the headaches of finding space or administration as they start up. "We kicked it off this March and have six reps building their firms there now. It's creating a bit of a buzz," Fischer says.
As planners move upstream, so do firms, as they choose who they want to recruit.
"The wooing process is a two-way street. They're evaluating us, and we're simultaneously evaluating them," says Andrew Daniels, director of field development for Commonwealth. "We're not only empowered to find people who we think are good fits, we're expected to do it," he says. "Challenging, demanding and nice" are the first words that come to Daniels' mind to describe good recruits. The company also has an affinity for those who take a needs-based approach to planning. In the past four years, Commonwealth has raised its production minimum to $100,000 per year from $25,000. "We want to keep our hands on the pulse of our services levels to ensure the seams aren't stretching, but at the same time we need to keep upping the ante," Daniels says. The firm has 825 reps, up from 780 last year. "We've had a lot of $10,000 and $20,000 reps move on, and have replaced them with higher-producing folks," he adds. "But we also had our best recruiting and highest gross revenue year ever in 2002, so, given the economy, we're extremely pleased."
At LPL, the firm is also choosy, even going so far as to develop an official "scorecard" (available from the firm's Web site www.trueindependence.com) allowing planners in the market for an independent broker-dealer to rate firms in terms of support and technology. "Of course, we hope we're the firm that comes out ahead," says Bill Dwyer, LPL's executive director of branch development.
The firm, which has 4,700 reps and 2,200 branches, grew at a 10% clip last year and is on track to do the same again this year-the firm's target, Dwyer says. Planners need to have $125,000 in production to open a branch with LPL, though the firm's sweet spot is $250,000 to $500,000.