Howard Diamond Quoted
By Ben McLannahan
An age-old recruitment game on Wall Street it goes something like this.
Broker A hires a team of financial advisers from Broker B. Broker A agrees some huge signing bonus: perhaps 21⁄2 times their gross fees and commissions over the previous 12 months, half delivered up front as a cash loan, forgivable over as many as nine years, with the rest contingent on hitting asset or revenue targets over that period. A few months later Broker B strikes back at Broker A, offering a package worth three times the gross revenues. And so on.
But now the rules could be changing. This week Morgan Stanley put out an internal memo saying it would “significantly” reduce recruitment of experienced advisers to its ranks of 15,800 or so. Two weeks earlier Merrill Lynch, which has about 16,300 advisers in its “thundering herd” within Bank of America, had said pretty much the same thing.
Both are falling in line with UBS, which announced last June that it planned a 40 per cent reduction in the numbers of advisers hired each year from outside.
“There’s a gap of $1m-$2m advisers everybody wants,” says Howard Diamond of Diamond Consultants, a recruitment firm in Morristown, New Jersey, referring to the mid-point between juniors ($250,000 in annual revenues) and all-star performers ($5m+).
“If you’re sitting there at UBS, and the firm is saying ‘we’re not recruiting you type of people any more’, they’re not feeling the love,” he says.