Elementos de los Planes de Acción de los Países de la Unión Europea. Fuente:

Attracting and keeping investment professionals is an important part of winning the broker-dealer race for talent. Developing professionals, advancing their skills and supporting the growth of their businesses will seal victory. Investment professional development is a contributing factor for recruiting and retention success and directly contributes toward increased broker-dealer profitability. Despite the importance of developing professionals, there are plenty of potential areas where broker-dealers could be doing more.

Providing relevant education opportunities in the form of workshops, seminars and conferences can provide investment professionals guidance in building and expanding their business. These can be supplemented by the use of electronic media, such as web-based educational programs that may include scheduled events as well as specific topical programs that investment professionals and their staffs can access on demand.

Electronic resources are particularly valuable to independent branch managers with responsibility for educating and training new professionals and staff. Properly designed training programs and resources will raise skill levels as well as strengthen investment professional loyalty with the broker-dealer.

Development programs that aim for professionals to create viable long-term business concerns will expand training offerings beyond traditionally provided sales coaching and product information. Comprehensive assistance programs will focus on business-building skills and maintaining investment professional technical expertise in fast-developing areas such as tax policy, health care planning and risk management.

The best development programs will draw from a wide assortment of ideas and resources. Vendors, clearing firms, broker-dealer management, product and operations groups, and investment professionals themselves are potential sources of best practices that can be codified and disseminated via training media.

Developing new or less experienced professionals is a particularly underserved area for most broker-dealers. A rich competitive advantage awaits broker-dealer firms that unlock the secret of procuring, and retaining, entry level investment professionals in a cost-effective manner. The answer lies in the ability of broker-dealers to establish a professional career path within their systems that is accompanied by a network of support resources to facilitate progressing individuals increasingly further up the path.

Career development for the less experienced investment professional can nicely complement a broker-dealer’s succession program. Senior professionals, in need of successors, are an obvious, willing and low-cost means to facilitate the careers of more junior professionals. The challenge for the broker-dealer is to put a structure in place that properly matches senior and junior professionals and provides senior professionals with a mentoring framework for advancing their less experienced subordinates.

In order to better utilize and develop new talent, forward-thinking broker-dealers will also look for ways to leverage university financial planning programs. University programs have grown rapidly in recent years. As of 2009, more than 200 institutions offered CFP board-registered financial planning programs nationwide.

Nearly 100 universities now offer financial planning undergraduate degrees. Universities can provide a direct source of capable new investment professionals as well expertise and resources for broker-dealers interested in building out their own development programs. Many broker-dealers are also partnering with established external coaching and mentoring programs in order to more expediently guide professional development.

Conclusion

With the right strategies and tactics every broker-dealer has an opportunity to win the race for talent. Clearly, however, most firms will need to change their ways if they are to realize success. The marketplace for advice is dynamic and evolving rapidly. Investment professionals have options for the firms they affiliate with and the higher the quality of the professional the more options that are available.

The stakes are high. Since 2003, the broker-dealer industry has shrunk by more than 100 firms per year on average. According to the Financial Industry Regulatory Authority, the number of brokerage firms dropped from 5,392 in 2003 to 4,663 as of July 2010, a decline of 14%. To survive, broker-dealers must evolve their recruitment, development and retention practices or risk being left behind.

Although this report covers a great many issues, brokerage executives who are positioning their firms for the long-term would be well-served to pay particular attention to the following key lessons:

> Recruiting is necessary but insufficient. Attracting and keeping investment professionals is an important part of winning the broker-dealer race for top talent. Developing professionals, advancing their skills and supporting the growth of their businesses will seal victory. Without equal emphasis on professional retention and development, broker-dealers will never enjoy sustainable success. Recruiting, retention and development are tightly interrelated. Each function, if done well, complements and enhances the others, effectively creating an “upward spiral” that will grow and enhance a firm’s base of investment professionals.

> A distinct value proposition and well-defined target market provides the foundation. A value proposition that stands apart from competitors and speaks to the broker-dealer’s target market will provide the compass for attracting the best-fitting investment professionals to the firm and engendering their long-term loyalty.

> Long-term retention starts with smart recruiting. If correctly and sufficiently defined, the broker-dealer’s target profile will specifically outline the characteristics of investment professionals the firm is best-suited to serve and will further correlate with the type of professional most likely to remain loyal to the firm for an extended period of time.

> Quality service and support is a result of being in true alignment with investment professional needs.

Virtually every broker-dealer touts ability to provide “outstanding service.” Those that follow through with outstanding service recognize and are constantly aware that the broker-dealer only succeeds when its investment professionals succeed. These firms are constantly on the lookout for new ways to make it easier for professionals to conduct and grow business.

> Retaining and progressing entry level professionals offers rich potential. To do so, however, requires broker-dealers establish a professional career path accompanied by a network of support resources to facilitate progression. Under the right structure, developing less experienced investment professionals could nicely complement a broker-dealer’s succession program.

In summary, the race will be won based on a broker-dealer’s combined effectiveness in recruiting, retention and development. No matter what the phase of the relationship, the most successful broker-dealers will position the firm as the trusted partner of its targeted professionals. As such, the broker-dealer will demonstrate an unwavering commitment toward meeting the business needs and realizing the personal aspirations of its investment professionals. Only by creating a prosperous environment for professionals will the broker-dealer be able to achieve long-term prosperity as well.

acknowledgements

We gratefully acknowledge executives of the following firms, who contributed their insights to this report.

Participating Firm Location Participant

Benjamin F. Edwards & Co. st. Louis, MO Marty altenberger senior V.P., Branch services

Capital Guardian Belmont, NC alan Boyer

Chief executive Officer

CFG/H. Beck Rockville, Md Richard Merritt

V.P., Business development Commonwealth Financial Network Waltham, Ma andrew daniels

Managing Principal, Field dev.

First Allied Securities san diego, Ca Matthew Bassuk

senior V.P., Business development Summit Brokerage Services Boca Raton, FL dennis Kaminski

executive V.P., CMO

Additionally, we extend special thanks to the Financial Services Institute (FSI) for granting us the

authorization to repurpose data from its Broker-Dealer Financial Performance Studies. The complete annual FSI reports are only available to member broker-dealer firms. For information about joining FSI and obtaining these reports, see www.financialservices.org.