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Blogs - The Diamond Appraisal
Recruiter or No Recruiter? That is the Question
Diamond Consultants
Monday, April 15, 2013
Partner Insights

Would Alex Rodriguez have landed his unprecedented $275 million contract with the Yankees without super-agent Scott Boras guiding him along the way? Would Vice President Joseph Biden think about running for President without trusted advisors by his side?†

The obvious answers in these high profile examples are "no," but let's draw a comparison to a top financial advisor who is contemplating moving himself and his sizable book of business to a new firm.† Should this super star advisor use a recruiter to represent his interests?† Does he need to?† After all, he is on the radar of every manager in town and he has friends working at any firm he might consider moving to.†

The question of whether or not a recruiter is needed in cases like this is fair, and one that I hear on a regular basis.†


Today's top recruiters are no longer transactional, job order driven used car salesmen trying to sell you on the deal of the day.† Recruiters who earn the trust of quality advisors are consultative professionals who ďseek first to understand, then be understoodĒ as Stephen Covey writes in The Seven Habits of Highly Effective People.†† He or she takes all of the goals, frustrations, and unique information about each individual advisor's business mix and model and uses that to determine a customized set of potential opportunities that could meet the needs of that advisor.† This recruiter is a student of the industry, knows it inside and out, can objectify the pros and cons of any firm or model, and can help the advisor to determine how each solution might move the needle for him.† A good recruiter says "You shouldn't even think about leaving your firm unless you are able to find a solution that is much more than marginally better than where you are now," thus making it comfortable for the advisor to choose to stay put if he doesn't find an opportunity that fits the bill.

With some obvious bias, following are the 10 best reasons for top advisors to use a recruiter:

  1. To streamline a dizzying due diligence process:† Your job as an advisor is to manage your clients' money and to nurture those relationships. The most complex due diligence process can be a full time job and a good recruiter functions as the quarterback so you donít have to.
  2. To know the entire industry landscape:† Sometimes the best options are not the obvious ones.† The landscape has evolved considerably and top advisors want to know ALL of their options including what it means to be independent, for example, even if they have no intention of heading in that direction.
  3. To gain completely objective information about the pros and cons of each option: The best recruiters are those who work across the entire landscape and can present opportunities with only the advisorís best interest in mind.
  4. To negotiate the best deal:† Skilled recruiters know what can and canít be negotiated for.† Their ability to ask for things you may not have thought of, allowing you to remain at armís length, can be a tremendous benefit and work to your advantage.
  5. To act as agent advocating for the best interests of the advisor: Good recruiters know everything about an advisorís business, personal and professional goals for the future, and how to best to bring them to life by identifying appropriate solutions.
  6. To provide spreadsheets, matrices, and other tools: †With an overwhelming number of options to consider and needs to be met, itís critical to have access to the best resources to help you compare and contrast them.
  7. To protect your confidentiality: Many advisors donít want to reveal their identities early on in the due diligence process and recruiters can help gather information on their behalf. As advisors move through the due diligence process, allowing a recruiter to maintain the bulk of your connection to another firm ensures your confidentiality.
  8. To ask the right questions:† Advisors know their business, and recruiters know theirs; we know the questions that need to be asked in the due diligence process so that there are no surprises in the end.
  9. To be educated on relevant industry trends:† Whether an advisor chooses to move or not, a recruiter is a wealth of cutting edge, industry knowledge.
  10. To receive a purely value add experience:† Working with a recruiter is a purely upside proposition.† Advisors access a recruiterís best thinking, time and effort at NO COST Ė whether or not the advisor decides to make a move.† If they do, there is no negative financial impact on their deal.


(3) Comments
Mindy - This is an excellent article. In this day and age when "all the information" is supposedly available on the internet, it is easy to think that recruiters have become superfluous. The reality is that relationships have never been more important in negotiating and finalizing a good match. Recruiters have them. We have placed many advisors with a variety of firms and know the cultures and nuances of each situation that cannot be discovered on line. The old expression "buyer beware" applies to financial advisors looking for a new firm. Recruiters can lessen the impact of that substantially. Thanks for your contribution. Mitch Vigeveno, Turning Point Inc
Posted by Mitch V | Tuesday, April 16 2013 at 9:35AM ET
I agree Mitch V, the answer, of course is "yes" a quality producer needs professional representation! Excellent piece Mindy. I urge producers to use a pro such as Mindy at Diamond Consultants, Mitch at Turning Point or my firm IBDSearch to help with their search. We can share information that's not online or in glossy brochures as we talk to firms' producers, senior management, clearing firms, get curb-sides from industry people, read their financials, we know which ones are for sale, and we stay on top of regulatory issues. At IBD we have agreements in place with 40 financial services companies. Nice piece.
Posted by Bradley F | Tuesday, April 16 2013 at 10:59AM ET
Thanks to Mindy Diamond, my Team found a new home on February 1. I was initially skeptical. Now, we are "true believers" in using recruiters. The most valuable part: she did the legwork and got a "no interest here" from some firms. That saved us huge numbers of man-hours. Sometimes the bad news is the most valuable news of all. Diamond's expertise was worth its weight in gold.
Posted by Roger F | Saturday, April 20 2013 at 8:56AM ET
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