Shanks added that advisors need to understand that if the broker-dealers do not benefit, than the advisor will not be able to benefit.
Henschen spoke about 40% bonuses being offered to advisors. He wondered if this made sense, asking, “When do they make money? In seven to eight years?” He cautioned advisors to not accept these offers blindly though, as these broker-dealers often pad expenses. “They play a lot of games,” said Henschen.
Papike recommended advisors ask for a one-pager for all the broker-dealers’ expenses.
Russo spoke about another option advisors should consider -- working under a super OSJ model. “More and more of the advisors don’t see a downside risk with a super OSJ.”
Henschen added that negative comments online are becoming a real issue for some broker-dealers. Because advisors’ clients and prospects are now very comfortable doing searches online, advisors cannot risk associating themselves with broker-dealers with bad online reputations.
A Flaw The Industry Needs To Address
A show of hands in the recruiters’ panel session suggested that almost no broker-dealers want to take on junior advisors with little or no business.
Tom Endersbe, of Endersbe, Herron and Associates, gave a presentation about the graying of the advisory business. He challenged the attendees, saying, “There is enough change in the industry that you have to take a bold move.”
He explained that since advisors are stuck in their day-to-day duties, they must count on broker-dealers to have a vision for the future, since the B-Ds see things from a much different angle.
"Seventy-one percent of the assets under management will have a new leader in the next 14 years," he said. "It is a goldmine or a huge risk. It can be an opportunity or be scary.”
Endersbe said that 59% of advisors in the independent channel plan to fully exit the business in the next 10 years, but almost half of advisors have no formal succession or continuity plan. Thus, the industry needs to focus on what lies ahead and needs to start developing the next generation of advisors.