The going rate for traditional recruiting is about six points on revenue, meaning you’re paying out $60,000 for every $1 million. Depending on your firm’s profitability, that may take too long to break even after finding an advisor or be too high a price at all.
2. Centers of Influence
But if traditional recruiters aren’t for you, there are other options. If you’re affiliated with an independent broker-dealer, your IBD may have a variety of resources available to help with recruiting—and it’s simply a matter of asking for them to think of when.
If you’re an RIA, you can go to your custodian and ask them to refer to you when they come across a good fit in your market. Or even ask wholesalers, who spend a lot of time in front of advisors, to keep you informed if they run into an office with an unhappy advisor who wants to break away from their current employer.
3. Other Resources
Once you’ve tried those top levels, you can look to industry associations you might be part of, like the FPA, to try networking and communicating with other advisors there. If you want to grow inorganically, the best way may simply be to find another advisor with a similarly sized firm and join forces.
You may also want to look at technology on the market designed to make it easier for advisors to connect with right-fit firms, without the high costs typically associated with the process.
What to Focus on When Recruiting
Before you go out and recruit, it’s important to first take inventory of yourself and what you have to offer another advisor. Start here and:
1. Look at Your Branding
Your branding should hopefully be a simple box to check. Look at your website and digital presence as a starting point. Ask yourself: “Do I articulate my value well wherever I can be found online?”
2. Figure Out the Dollars
It’s a good idea to determine what you can spend, and how you’ll spend it, before you start. You need to know what profitability you’re looking for to calculate the right payment to offer, but you also need to have an awareness of how what you can offer stacks up to other firms like yours.
A final item to consider—can you or your partners offer transition money to make the move ot your firm easier?
Rehearse Your Story
Branding on point and you know what you can offer? Now, focus on telling your story. Be ready to explain what makes your firm unique in a moment’s notice.
And there you have it—the why, how and what of recruiting. Now, you’re ready to go out and recruit to build your firm the right way.
Ryan Shanks is founder and CEO of FA Match, a digital recruitment platform that connects experienced advisors with financial services firms equipped to help them thrive. Ryan brings over 20 years of experience as a recruiter and “sports agent” to financial advisors.