April 29, 2024
Louis Diamond Quoted
By Dan Shaw
When it comes to compensation, industry recruiters say it’s not just the amounts that matter to advisors. Two other prized qualities in firms’ pay policies are simplicity and consistency from year to year.
As far as simplicity is concerned, advisors rarely get what they want. The industry trend, said Danny Sarch, the president of the recruiting company Leitner Sarch Consultants, has been to add incentives to encourage advisors to do certain things — and disincentives to penalize them for doing others.
“A cynical advisor once told me the first few pages of a pay policy tell you how you’re being paid and the next 30 pages say how they can take it away,” Sarch said. “Some small firms have kept their payout very stable. But the biggest ones, certainly the wirehouses, seem to tinker with their pay every year or every other year.”
“A cynical advisor once told me the first few pages of a pay policy tell you how you’re being paid and the next 30 pages say how they can take it away,” Sarch said. “Some small firms have kept their payout very stable. But the biggest ones, certainly the wirehouses, seem to tinker with their pay every year or every other year.”
Louis Diamond, the president of the recruiting firm Diamond Consultants, has seen much the same. “Every year it’s more and more complex,” he said. “They add something, and then the next year, they either double down on it, or they look to clarify it or to change a part of it. It just adds another wrinkle to the mix.”
