Done Deals 2014

July 22, 2014

 

$2.1MM T12 @ 125%, 7 years

$1.4MM T12 @ 125%, 9 years

$2.8MM T12 @ 120%, 9 years

$800K T12 @ 120%, 7 years

 

Typical mix of bogeys including:

(NEW COMMENTARY BELOW 7-22-14)

Asset Migration

Managed v. Discretionary %s

70%, 80%, 90%, 100%, 110%, 120% T12 hurdles

 

Deferred Comp (stock, cash)

Retention to 150% @ 5 yrs

Options

The LatAm market is continuing to lose appetite for Venezuela.  We represent several candidates with domestic AUM held at Pershing/BONY where the account owner is living offshore.  It has been quite difficult finding a new home for them but for every action, there’s an equal and opposite reaction.

Predictably, several smaller B/D clients have expressed renewed interest in Venezuela and they are actively gaining market share.  We believe that the “herd mentality” has gripped the largest B/Ds and there is an audible uncoupling of Venezuela desire.  The first movers to pick up this market segment may – assuming their risk/compliance controls are perfectly in place/executed – may have their day in the sun after-all.

Compliance to FACTA’s Reg E re Truth In Lending becomes even more onerous to the Lender as outlined here:

http://www.philadelphiafed.org/bank-resources/publications/consumer-compliance-outlook/2012/third-quarter/overview-of-new-regulation-e-requirements.cfm

Why does this matter?  Specifically, the B/D becomes far more responsible to the chain-of-custody when lending to a client in any capacity.  Just a quick snapshot of the B/D must do is below:

“To implement the final rule, financial institutions will have to update their policies and procedures, training, and computer systems. Given the complexity of the changes, it is important that financial institutions start the process early and rigorously test their systems for compliance. Specific issues should be discussed with the CFPB and your primary regulator.”

Compliance is driving strategy for many institutions and ironically, seems to outweigh the risk of Sovereign default, geo-politics, human rights abuses and even anti-Americanism.  I’m not waving the flag but simply noting that compliance is the driver for change here – not vanilla risk.  This is the world we live in and evolving is key to growth.

Reach out for an off line conversation scott@elevationsearch.com with real world examples – S

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Done Deals 2014

July 7, 2014

$2.1MM T12 @ 125%, 7 years

$1.4MM T12 @ 125%, 9 years

$2.8MM T12 @ 120%, 9 years

$800K T12 @ 120%, 7 years

 

Typical mix of bogeys including:

 

Asset Migration

Managed v. Discretionary %s

70%, 80%, 90%, 100%, 110%, 120% T12 hurdles

 

Deferred Comp (stock, cash)

Retention to 150% @ 5 yrs

Options

 

The market is moving nicely while many others talking about the “greying” of the FA universe.  There is truth to this of course but I argue that this is the time to monetize a book, put the finishing touches on a retirement strategy and prepare for market volatility (if/and/when that may happen).  It’s amazing that so many candidates refer to their firm’s “Twilight/Transition Plans” without running the numbers through an actuary . . .

 

We continue to see FA immunization to headline risk.  Personally, as a client to 2 wirehouse, I can testify that a negative/positive headline no longer moves the needle and I simply don’t care.  Candidates are narrowly  focused on how a trade away will benefit their current clients and move their prospects out of the pipeline and into the production line.  If you are a client reading this – know that the prospect pipeline needs as much attention as the existing clients throughout the interview process . . . a broken record I am on this topic.

 

Reach out for an off line conversation with real world examples – S

The Client’s Perspective

November 2, 2012

The Client’s Perspective

My money is managed by an FA with 22 yrs experience at a wirehouse. She was the only service provider to reach out to me during Hurricane Sandy to see how my nuclear and extended family was doing. Clients & candidates called (many of you reading this actually). It was a genuine call and if I needed anything I don’t doubt she would have searched her personal network of friends, family and clients nearby to help out. We were prepared for the storm but many, many of our closes friends have suffered losses.

For what it’s worth, calls like these (and consistent performance in line with our mutual expectations) cement a relationship and lead to referrals. My CPA, attorney, IT guy and insurance rep didn’t call me and I don’t hold it against them but I will remember the call from my FA and she will always be top of mind . . . Natural disasters seem to bring out the best in some people and lay the bed-rock for generations of trust across the board – S

November 2, 2012

#1 Issue to consider when trading away?

Moving Assets is always the #1 most weighted piece of the calculus when pondering a move.  It evokes a spine tingling sense of fear & dread  about losing a hard-won client.  Even more powerful is the reward of a loyal client who respects you as a professional by making the ACAT easy & painless.  There are many parts of the due diligence process when weighing a trade-away but typically, the on-boarding of existing clients gets the least attention.

We’ve re-inserted the “Client On-Boarding” experience to the 2nd most critical part of the due diligence process for our candidates.  Grid placement, incentive front/back money, products, technology, platform, firm & BOM reputation . . .etc. are all equally crucial but the psychology of knowing that a move can be done gracefully and not as painfully as imagined is a mind opening experience for many.

90 days after a move, we regularly hear that when the clients were approached and told of the new firm they were almost all loyal to the adviser and not the BOM designated FA who called them the day our candidate(s) resigned.  Having a more confident and less fearful sense of moving assets means that your internal microscope can focus on the other criteria with more clarity and objectivity.

 

scott@elevationsearch.com

Who & Where Hiring is Aggressive

Wealth Management continues to be one of the only bright spots in the recruiting world.  It’s easy to understand why.  Where else in Financial Services do you have cash flow from production, sticky assets and a loyal following to the person v. the institution?  If there was another area as strong we would be recruiting in it. 

We speculated that the large incentive packages to trade away would eventually stall out in light of the Basel Accords and increased scrutiny from US regulators but it’s just not happening.  Wirehouse firms are still marketing 300-330% deals with terms ranging from 7-9+ years with evergreen clauses for bogeys & asset migration.  The boutique firms, smaller in size, but no less adept at UHNW management are offering modified terms but can end up in the same altitude of pay-outs.

Candidates continue to keep us in the loop on who’s paying what and terms of deals throughout the US, EMEAsia & LatAm.  We are seeing a trend of lower payouts when a search firm is not involved (I know that reeks of a certain bias . . . but it’s what we’re hearing)

As we preach to clients & candidates willing to listen – the incentive packages are never the only reason to trade away.  Feel free to reach out and dialogue with me about why your specific situation is best for your clients and you in the long run. 

scott@elevationsearch.com

($200K in the Northeast)

Interesting article and TOTALLY consistent with the new rule of thumb that:

2.5X your income is how you perceive the concept of RICH . . . there’s an interesting body of work in this area . . .

http://www.investmentnews.com/article/20120827/FREE/120829941?utm_source=indaily-20120827&utm_medium=in-newsletter&utm_campaign=investmentnews&utm_term=text

 http://elevationsearch.com/open-positions.php?action=searchregions&region_id=5

– bilingual Spanish/English . . . $100K+

– great opportunity to grow and earn multiples of above amount

– See position above by clicking on link

 

Broker Compensation

July 26, 2012

Broker Compensation

Congratulations are in place for UBS per the link below.  The sample of T12 +/- $1MM USD was used to determine the winner . . . While we have some very good friends at UBS, it is our experience that each Wirehouse and Broker/Dealer don’t payout new hires EXACTLY the same.  Why the disparity?

In no particular order:  Mix of products, Production and/or TIB/LOE as compared to FAs at hiring firm, T12 as compared to TIB/LOE, U4 hits and the most critical is the speed at which an FA became a $1MM producer.  Grid location and flexibility can also be a regionally unique event that may be driven by the need to grow an area(s) so what works in Atlanta may not work in Boston or Miami versus NYC.

For example, we have a client that pays 55% on T12 > $3MM retroactive to $1 on a specific type of revenue and mix.  Other clients will never go past 50% no matter how the T12 is derived.  Others can go higher than 55% in hybrid RIA/Wirehouse models but those rates don’t account for hard & soft dollar expenses not accounted for in the traditional non-RIA broker model.

VISA News – H1B

July 26, 2012

VISA News

 

The last H1B application for 2012 was approved on June 4th.  This closing date was the earliest since 2009 and represents an uptick in skilled hiring throughout the US.  Each week averaged approximately 6500 applications with a high of 17,000 and a low of 2500.  See the graph representing years 2008-2012 and the obvious change in trend.

We were involved with 3 candidate placements needing H1Bs this Spring and were successful in all 3 cases.  L1 Visas still tend to be difficult to move (unless it’s from Spanish Bank A to Spanish Bank B) and those candidates with L1 Visas must now wait until April 1, 2013 to apply for the H1B and wait even longer until October 1, 2013 until they can make a move.

Our expectation is that 2013 will be an even shorter H1B season due to the burgeoning North American Energy services sectors growing at a break neck pace.  We do have clients with open H1Bs so if you are concerned about the H1B application period being closed send me an email to discuss options in private scott@elevationsearch.com

 

Finally, not getting paid for certain job duties is a part of every position.  Some BOMs can stretch this out just a little bit.  Below is the entertaining story of a $1MM T12 producer who’s now rapidly looking for an exit . . . In retrospect he admits he should have just said no when approached or been given his pick of which trainee he could partner up with: 

After teaching a class on AML & The Patriot Act to rookies once a week for a year he was rewarded with a lunch at Sbarro.  Not just any lunch, but a single slice of pizza without a nod from the BOM or the Regional Director who subtly mentioned that this was a “leadership opportunity”.  The class failed their internal compliance tests and this FA (now a candidate) was forced to re-test for his Series 14 due to internal compliance being concerned about his knowledge. 

The class failed mostly because the veteran producers told them it was a waste of time (tongue in cheek?)  With the brand new Series 14 under his belt he is now the unpaid head of training on a regional basis which has required paid for travel by car, missed client calls and diminished prospecting opportunities.  In the end “be a team player as long as it’s additive to your T12 which is ultimately beneficial to whomever asked you to do XYZ.”

Drop me a note on your story – scott@elevationsearch.com