Forget the gossip by the water cooler. Furtive phone calls are so 2013. From now on, when youre wondering about another advisors recruiting deal, youll be able to look it up, courtesy of AdvisorHUB.
Were bringing access and transparency to the financial advisor recruiting process, says Andrew Parish, CEO of Columbus, Ohio-based AdvisorHUB. There are two arrows in the AdvisorHub quiver. One is a website,
MOBILE APP
Nevertheless, Parish anticipates most of the action will be in the second AdvisorHub product, a mobile app that was introduced early this year. Advisors will want to see the deal terms, he says. For a one-time fee of $9.99, advisors have information from nearly 30 companies, updated weekly. Wirehouse deals from Morgan Stanley, UBS, and Merrill Lynch will be available for inspection and comparison, along with recruitment offers from large regional firms.
Parish, who also is managing director of AdvisorHUBs parent Axiom Consulting Group, a wealthmanagement recruiting firm, says that his experience and contacts in the industry provide him with the latest information on recruiting offers, which will be posted on both the website and the app. We show the specific features of these deals, he says, providing information that hasnt been easily accessible.
For instance, a wirehouse deal might offer an advisor 330%-360% of trailing 12 months production. The AdvisorHUB app will break down the details: perhaps 150%-165% in upfront cash, a year 1 hurdle of 70% of former assets and revenues, a year 2 hurdle of 85%, and so on. Annual payout bonuses also will be revealed, as a percentage of production. For example, if the advisor has at least 70% of his or her former assets under management and has generated at least 70% of prior revenues after one year, another X% of trailing production will be paid in addition to the usual payout at the new firm.
SHEER CURIOUSITY
Will such information be useful to advisors? One advisor who has looked at AdvisorHUB is Michael Kitces, partner and director of research at Pinnacle Advisory Group in Columbia, Md. Writing for his personal
Responding to a question about the usefulness of AdvisorHUBs data, Kitces asserts that from a practical perspective, the primary value of AdvisorHUB is for brokers (especially those at wirehouses) looking to change to another broker-dealer (especially another wirehouse). What about RIAs? Given that there is basically zero movement from the RIAs to the wirehouse community, Kitces says, theres really no relevance to AdvisorHUB for RIAs, beyond perhaps the sheer curiosity of seeing whats happening on the other side.
Advisors looking to change broker-dealers may want to know what recruiting deals are out there, according to Kitces, and that information might influence their decision about where to go. The AdvisorHUB data also can show whether an advisor is getting a reasonable offer from a broker-dealer, if the negotiation has proceeded that far.
Say Im thinking about leaving ABC brokerage to go to XYZ brokerage, says Kitces, and ABC is offering me a retention deal. I can use AdvisorHUB to see what XYZ brokerage might give me to leave, and I also can use AdvisorHUB to see if PQR brokerage might give me more than XYZ. In addition, the AdvisorHUB data can be used to see how ABCs retention package compares with outside recruiting deals, keeping in mind that switching firms might pay more but staying in place typically means less work/stress/hassle/risk, as Kitces puts it.
An advisor with a wirehouse has a slightly different take on AdvisorHUB. We have seen RIAs join our firm recently, he says. Such moves might not be highly publicized but they do occur. Therefore, RIAs can use AdvisorHUB to see what their book might be worth to a wirehouse or a regional firm.
This wirehouse advisor, who participated in the beta test of AdvisorHUB, calls the program revolutionary. Most advisors dont know what their practice is worth, he says, but now they can quickly get an idea of what the current deals look like.
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