My first year recruiting was trial by fire. No formalized training or guidance, just get out there and figure it out. As with any learning curve, I quickly determined what works and what results only in futility. The purpose of this article is to share principles, practices and behaviors that broker dealers can use to avoid mistakes and dramatically improve their recruiting results.

1) Ignoring Advisor Prospects

There was a time when I´d go along and MC home office visits by prospective advisors with an insurance-based broker dealer. My first couple of prospects spent about 20 minutes with the BD´s president. By the fourth visit, the president decided he was too busy to spend time with mere prospects. The trouble was, many of those prospects were top producers who were well worth the time. Needless to say, the advisors felt slighted, which made my job that much more difficult.

Prospective advisors naturally gravitate to BDs that make them feel wanted. If your recruiters and staff aren´t showering prospects with attention, you´ll probably lose them to someone who is.

2) Arrogance and Runaway Egos

Never let people in your firm display inflated egos! Take it from Zig Ziglar:

Egomania is a strange disease… it makes everyone sick except the person who has it.

When prospective advisors are visiting broker dealers, some firms will inevitably have someone speaking to the advisor who goes on and on about where they worked, where they went to college, the degrees they hold or their professional designations. Who cares! This time is not about them, it´s about the advisor, and what the broker dealer can do for him.

It is said that confidence can be misconstrued as arrogance. When advisors return from broker-dealer home office visits, I´m often the recipient of their feedback. Comments like “Gee, aren´t they full of themselves?” let me know when a firm has crossed the very fine line between confidence and arrogance.

3) Unprofessional Marketing Materials

Occasionally, I´ll encounter a broker dealer´s story line that is at odds with its marketing materials. I´ll discuss a particular broker dealer with prospects and they´ll be looking forward to receiving the firm´s marketing kit—only to get something in the mail that is a lot less impressive than the original narrative. (See my

article, “Making the Most of Marketing Kits,” Broker Dealer, Vol.3 / Issue 6, or visit the “In The News” section of my website,, for a PDF version).

The bottom line: Your marketing materials must be professional-looking and accurately represent your firm, or they will detract from your recruiting efforts and be bad for business.

4) A Weak Narrative

Forming and living a good narrative about a firm is among the hardest things for a broker dealer to do well. The most compelling stories I´ve heard include personal testimonies about what motivated a firm´s principals to form a broker dealer in the first place and how the firm developed from their original conception to where they are now. Other essential details are: the direction the firm is going to take in the future; what kind of business and advisors the firm wants to attract (and why); the firm´s perceived strengths and weaknesses; and what improvements are being made.

Other key areas to include are reviews of the broker dealer´s technology, service and transfer departments. However, you should avoid focusing on just one area (e.g., technology), expecting that to take care of everything else. Prospective advisors want the whole pie, not just a slice.

5) Passive Transitions

Advisors often worry that transferring their book of business will drag on for months, especially if the new broker dealer treats its transfer protocols as an afterthought. With block transfers harder and harder to come by, advisors are looking for more heads-up transfer support-and not getting it can be a deal-killer!

Some of the things broker dealers are now offering to help advisors with block transfers include:

Pre-population of form data

Sending a home office transfer person to an advisor´s office to help with paperwork (or)

Outsourcing paperwork help (or)

Compensating advisors for a temporary help with their transfer paperwork

A detailed narrative of your firm´s transfer process is essential if you want new advisors to feel they´ve chosen the right broker dealer. Also key is making sure the actual transition goes as smoothly and quickly as promised.

6) Lack of an Organized Recruiting Process and Procedures

Can you imagine a broker dealer sending out marketing kits to prospective reps, then waiting for the advisors to follow up? Sadly, that´s a lot more common than you might think. Recruiting isn´t rocket science, but it does take persistence.

Here´s the recruiting process in a nutshell:

Acquire a new lead

Gather extensive information, qualify the lead, and begin establishing a relationship

Send your broker-dealer marketing kit

Follow up within one week, further establishing the relationship, and suggesting a home office visit

Follow up again within a week, continue relationship building

Follow up, follow up, follow up

Are you noticing a pattern here?

I´m not saying you need to turn yourself into a stalker, just have something new and valid to bring up each time you contact prospective advisors. Granted, some prospects will just be window shopping and have no intension of making a move for another six months or more. That´s fine. After establishing a relationship and answering their questions, add them to your tickler file.

Another productive recruiting technique to consider is getting your firm´s president in on at least one of your initial contacts. Advisors find this flattering, making them feel important, which is exactly how they should feel. As noted, during each follow-up call you can answer prospects´ questions, bring up something new, like conferences, special trips for your top producers, new pending technologies, you name it, any number of things can be discussed during recruiting contacts.

The point is, use initial contacts with prospects as an opportunity to shine by showering prospective advisors with attention. By far, the firms that consistently attract and retain the best advisors are the ones that recruit in ways that make the advisors feel genuinely wanted.

When I say “establish a relationship,” I mean it should be a two-way street. Some recruiters simply dump information about their firms on prospects without spending enough time asking prospective advisors about their business, their backgrounds, their markets and where their businesses are going. An essential part of relationship building is being sincere and showing genuine interest in prospects. I´ve heard recruiters talk about follow-up as a chore, something they had to do. That tells me they´re talking to prospective advisors without any real empathy or interest.

Be real, or go do something else!

7) Not Using Wholesalers, Advisors or Clearing Firms

A lot of broker dealers never advertise, are never in BD surveys, and spend very little time or money marketing, yet they grow and thrive. What´s their secret?

When talking with advisors who are discontented with their current broker dealers, wholesalers will be more likely to refer them to your firm if the wholesaler has a strong relationship with you, and sees that your reps are happy. Otherwise don´t count on referrals. Wholesalers won´t refer advisors from one train wreck to another.

Another way to expand your recruiting efforts is by rewarding your own advisors for referring other reps to you. Many firms offer one-percent overrides for a year as an enticement for referrals. That won´t do much to motivate many advisors these days. If you want to see a healthy flow of referrals from your advisors, you´re going to have to offer overrides of at least two percent for two years.

Broker-dealer clearing firms can also be a great source of advisor referrals, so build relationships with key people at your clearing firm, and standby to reap the rewards.

Sure, change is hard for most broker dealers because it means leaving their comfort zones. We all have our shortcomings, but by focusing on proven recruiting principles, processes, tools and techniques—and avoiding the “Seven Recruiting Sins”—you can easily make changes for the better.

Jonathan Henschen, CFS, President of Henschen & Associates, Marine on St. Croix, MN, specializes in placing advisors with independent broker dealers. His firm has worked with wire-houses and independent broker dealers for over 15 years and has extensive contacts in the broker-dealer marketplace. Mr. Henschen is also a regular contributor to the publications On Wall Street, Investment News, Investment Advisor, Broker World, Bloomberg News and Broker Dealer Management. Visit his website, or contact him at (888) 820-8107, (651) 774-4161 or