Schwab Advisor Services has sent shockwaves through the recruiting world by rewiring how it pays for their services — perhaps laying the groundwork to slash commissions and cut out smaller recruiters.
But Mindy Diamond, who founded the industry’s largest recruiting firm, Diamond Consultants in Morristown, N.J., says the changes are a sunlight solution in search of a darkness problem.
Fees are spelled out clearly, and it’s not changed for more than two decades — namely 6% of the advisor’s previous 12 months of revenues.
“Advisors always want to know how we’re paid and who we represent,” she says. “Our answer is always the same: we represent you.”
It’s too soon to know how this new pay structure will change the specifics of recruiting, says Louis Diamond, president of Diamond Consultants, a leading recruitment firm.
“We have to figure it out. It’s all kind of fresh. We’re confident in our services and business model. Our business will be better and stronger and we think of it as an opportunity.”