Before entering a deal, and signing your bonus contract, read ALL the number of provisions.

The Wall Street Journal reports on Aug 2, that some bonus contracts reviewed by Dow Jones and several securities lawyers, show that some advisors in recent years have waived their right to file counterclaims against their ex-employer in arbitration proceedings that involve unpaid bonuses.

Under these contracts, if an advisor leaves the company without repaying a bonus, and the brokerage takes the advisor to arbitration to reclaim the money, the advisor can’t respond with direct counterclaims unless it’s simply a claim to prove they did repay the bonus. Brokers who have other grievances would have to file claims in separate proceedings.

(Counterclaims are an important negotiating tool for brokers in bonus cases and can involve complaints about failed promises or another type of grievance that would not warrant filing a separate case involving more time and money.)

It should be noted that Dow Jones interviewed over half a dozen lawyers for the report, and nearly all of them said it’s unusual for a brokerage to include a no-counterclaim clause in a bonus contract. However, a couple of them said it’s not uncommon.

So, check the fine print before you sign!

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In a competitive market, broker-dealers are struggling to find innovative ways to attract advisors. Some broker-dealers have found a way to stand apart from their competitors by offering a certain niche. They have figured out what financial advisors really want from a broker-dealer.

Jodie Papike, vice president at a broker placement firm, said,

“…Cambridge Investment Research (has) distinguished themselves as the fee-based expert (and) because of that, anyone doing fee-based business will talk to Cambridge. And that’s why they have had wonderful recruiting success.”

If your firm has a specialty that sets it apart from other firms, you must capitalize on it.

Having a brand name or familiar name can help market itself. Many broker-dealers have a brand name that people know of or at least heard of. For example, the name alone stands for how they do business or their great service. Larry Papike, president at a broker placement firm, said,

“LPL has long been on the leading edge of technology, but it recently tweaked that message by emphasizing how that technology can help make an advisor’s office more efficient and profitable.”

There are even options for the advisor who uses a more complex strategy for their clients. According to Jeff Schlegel in Who’s Your Market?,

“BrokersXpress is an independent broker-dealer that’s a wholly-owned subsidiary of OptionsXpress, an online stock, options and futures brokerage service…The company has a self-designed, Web-based platform that lets people trade stocks, options and futures on one account.”

This option is very desirable for particular advisors who want to manage money themselves.

There are so many options now more than ever that will cater to the specific needs of advisors. Broker-dealers need to continue to market themselves in unique ways to attract and retain advisors.

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Fidelity Investments joined TD Ameritrade in providing a web based tool that helps advisors who are considering leaving the wirehouses decide which independent model is best for them.

The “Financial Advisor Economic Estimator” tool enables advisors to compare the wirehouse model to three common independent business models:

• Starting their own RIA advisory firm
• Partnering with a third party by joining or acquiring a firm
• Affiliating with an independent broker-dealer.

Along with Ameritrade’s “Business Evaluator”, these tools were put in place to boost their recruiting of breakaway advisors, along with other inducements like fee wavers and price cuts.

But, as we’ve seen these past weeks, the wirehouses (i.e. Morgan Stanley and Merrill) have been begun signing bonuses that could exceed 300% of brokers’ annual production.

The “tug of war” in recruitment of FA’s between the wirehouses and the independents is stronger than ever and I foresee more competition than ever in the following months.

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Willis Consulting has experienced the power of networking, but even after nine years of growth and expansion, we still need to remind ourselves each day to get up and leave the computer.

Sure, the real-time searches, the web site postings and blogs, the e-mails, the hundreds of phone calls all serve their purpose in the 21^st century, and you’re dead without them these days, but the proven and real successes come when you are out there the old fashioned way – interacting and meeting face to face…the morning meetings, the double lunch days (company president Bill Willis does these), the afternoon meetings…

Then there is my specialty…networking arena – the Laker games! (Now THAT’S real networking!)

But you get my point…get up and get out there!

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Greed and Entitlement!

I thought I had seen it all until last week’s “resignation” of Merrill’s CEO John Thain…the revelation of his secret last minute 4 billion dollar bonuses paid out in December (versus “normal” January bonus payouts)

…Oh, and by the way, he was simultaneously preparing a report of 15.3 billion dollar fourth quarter losses!

Meanwhile, down the block B of A is writing a request for more government bailout funds!! Was it indignation I felt? Shock? Embarrassment? Or even rage?

Actually, I don’t think I felt much of anything; perhaps some sadness or resignation to the reality of what has become the “norm.”

But, I was somewhat encouraged to see that Ken Lewis bought 200,000 shares of B of A. I still foresee a good percentage of Merrill’s 19,000 financial advisors joining forces with the Brokers on the Move from the big wire houses this year, and Willis Consulting is in the process of expanding and paving the way to service and place these “movers.”

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I’m betting on the mid-range producers, with production under $500K, leaving the remaining big 5 wire houses in droves.

With little incentive to stay and poor, if any retention packages, these brokers will split and turn to smaller regional firms who are looking to build their wealth management assets.

I see this happening with Stifel Nicolaus and Ameriprise Financial, who have become very aggressive with their recruiting.

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OK, so IT is finally here…2009 and we’re ready for IT!

What is IT?

“IT” is CHANGE…that thing we have all been talking about.

So what change will we see in the Financial Services Recruiting arena? The general feeling of the Financial Recruiters Roundtable Discussion attended by our CEO and President, Bill Willis, focused on projected broker movement from the larger wire houses to the smaller regionals.

Obviously, most established FA’s are not pleased with their so called “retention” packages from the few remaining big houses. But WHAT will it take to get the brokers on the move in 2009?

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I had a few days over the Thanksgiving holiday to reflect on these challenging times facing us all. It’s tough to be optimistic when every aspect of the media is pessimistic and predicting doomsday.

So do we, as the “Main Street” taxpayers, succumb to this gloom and accept our fate? Well, I decided not to. (Might have something to do with the fact I have a family to support and business associates who depend on me!)

Anyway, it all comes back to stepping up and conquering what it is that is limiting us.

At Willis Consulting we’ll continue to do what we have always done each and every year:

• Define where we’re headed in 2009
• Set ourselves some challenging and achievable goals
• Create a POSITIVE plan of action!

We’ll be ready to roll in 2009!!

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I was in Starbucks yesterday and my eye fell upon the GOOD sheet.

Have you seen it? Pick one up; they’re free.

What is it? Well, according to the publisher, it is a

“…collaboration of individuals, businesses and nonprofits pushing the world forward.”

Each week the GOOD sheet plans to explore some of the major issues facing us this election season and beyond.

What I picked up this week was: RETHINK. The need for all of us to focus on how things are

• Imagine what they could be
• Don’t wait for change
• Be a catalyst for change

In other words, RETHINK.

Then I started trying to imagine how to utilize this in my arena. After these past weeks of market turmoil, RETHINK is what I’ve been doing.

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The new buzz word in recruiting is ‘innovative’ candidates…

Okay, so this is the new buzz word in recruiting; now I’m trying to figure out how this ties in with the financial services industry.

Innovative in what way, and how far does one take “innovation?”

I’m going to ponder on this one for awhile, especially after the past weeks of Wall Street “melt down.”

Any thoughts on this? I’d like to hear them.

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