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Kevin Daly - Feb 21, 2020

Active Recruiting of Financial Advisors

I came across this podcast and think it is very relevant for Agency managers looking to recruit an awesome face-to-face team.

 It's an interview with Manish Dave from Ameriprise which is a large American wealth management company that has 9,930 advisors, 3 channels and $611 billion client assets.

Manish talks about their very successful approach to recruiting existing advisors and their organizational structure.

We have converted the audio to text for those of you who prefer reading. 

The original podcast can be found at this link:
https://www.financial-planning.com/podcast/ameriprise-executive-discusses-financial-advisor-recruiting

 

[00:00:03] All right. Welcome back to our podcast here. Financial planning headquarters. My name is Tobias Sallinger. I'm a senior editor at Financial Planning. We are based here in New York City and we are talking today with a very special guest. We're glad to have him here.

[00:00:24] Manish Dave, he is the senior vice president for business development and experienced advisor recruiting at Ameriprise Financial. Thanks so much for being here. Thanks for having me. Tell me. Yes. So our listeners, I'm sure, are very familiar with Ameriprise, as is any advisor working in the independent space. But why don't we just run down some some overarching figures as we like to do here at F.P.? Ameriprise is, of course, one of the largest broker dealers in wealth management from both the franchise and employee channels, where you have about nine thousand nine hundred and thirty employees and franchise advisors with record total client assets of $611 billion dollars. That's according to the last earnings statement at the end of the third quarter. I saw recently that the company says some 4000 advisors have affiliated with Ameriprise since 2008 just for context purposes in the first three quarters of the year. The Advice in Wealth Management segment has generated nearly $5 billion dollars in revenue, which is up around 7 percent from the previous year. So you are in charge of recruiting experienced advisors and Ameriprise says it recruited ninety six of them in the third quarter. Tell me a little bit about the structure of your team and you know how you maintain that active recruiting of financial advisors nationwide.

[00:02:10] Absolutely do. I love hearing you go over the numbers because it just reminds me of how, you know, the scale of our firm. But yeah, you're absolutely right. So we have I lead our firm's efforts to bring experience and establish advisors to our company. The way that we organize the way I organize the business is very channel agnostic. I have 19 regional directors who cover the United States and they basically represent Ameriprise. There's three channels. And so the three channels being the employee channel or W2 business, the Independent Channel, which we call the Ameriprise Franchise Group. And then we actually a few years ago just started all the financial institutions business. So what we call the Ameriprise Financial Institutions Group, which serves banks, credit unions across the country. So 19 original directors that are having breakfast, lunch and dinner and really basically talking to advisers around whether or not Ameriprise makes sense for them. And if so, watch which channel would would be the make the most sense from an affiliation standpoint and that we've got some internal resources as well that help making sure that we're taking a look at the due diligence, looking at books of businesses, answering questions for advisers, showing casing our technology, our capabilities and. And so it's really a combination of in-field resources combined with some of our corporate resources.

[00:03:27] Yeah, absolutely. And something we were talking about beforehand. You mentioned that incoming advisors will do a home office visit. I've heard that some firms, prospective advisers will do that as well. What do you like to show them in Minneapolis and and kind of presents to either incoming or prospective advisors when you bring them to your home office?

[00:03:50] We really like to showcase the frozen tundra when they come to Minneapolis. And so is it colder and seeing minus 14 degree? Well, actually, the reality is when you come to Minneapolis, even in the winter, it's all connected downtown. And so you actually don't have to go outside as we are, as we would like to remind people that despite what the the the mercury will read. No, I actually think it's really important making a move as a huge decision for anyone, you know, either no matter if they're choosing Ameriprise or any other firm. And so I recommend anyone go and take a home office visit. When you come to Minneapolis and you see the headquarters or Ameriprise. It's been four hundred twenty five years in downtown Minneapolis. We've got two buildings. We've got 29 stories of our corporate headquarters and another twelve stories of our old corporate client service center.

[00:04:34] And there's no better way to really showcase the true breadth and capabilities of the firm than being right, you know, kind of in, you know, the mission central of where it all happens. And so we really bring people in so they could see the technology, the marketing capabilities, and really just get a sense of who the what the culture is like. And I think that to me, you know, we like to showcase that.

[00:04:59] And we have. Really? We have a number of people coming into Minneapolis, as I mentioned earlier, to we also have a a location here in New York, which over the Freedom Tower, which is, you know, a great location as well. But in terms of the corporate presence, you know, Minneapolis is really where you get a full sense of that.

[00:05:15] I see. I see.

[00:05:16] And so you said there's a team of 19 regional directors who are reporting to you and then they have teams under them who are also working or how does that work?

[00:05:26] No, they're pretty much there. They're individual contributors. Now we know who they partner with is the leaders in the various business channels. And so our independent system is a little unique in that we've we divide the country up in about 20 regions on the independent side. And then on the W2 side, we have roughly a hundred and thirty five branches on the W2 side of the business. And so my 19 are kind of engaging with the field leaders across Ameriprise who may be managing a branch office or a group of branches or the independent leaders who are managing in some cases several states, or overseeing and helping provide Ameriprise services to a number of independent practitioners.

[00:06:06] Absolutely. And and I think we've also spoken about this in the past. But I think it's it's important for our listeners just in terms of that structure where it does Ameriprise come down in terms of having OS JS or do you think of the large enterprise practices as OS JS or how do you sort of classify that within your structure?

[00:06:30] Sure. We've got a little different model than the traditional independents that are out there. And so we do have registered principles that are in the field, but we have kind of a hybrid supervision model. So we'll actually ask our practices to self supervise or any of that, any of those duties the on the 10 99 side of the business. So there is really not a lot of you know, we're not recruiting in OS JS per say. I will recruit in large teams and large businesses and we won't ask them to have to take on the supervisory burden of managing compliance for their area. We'll take that on through our existing infrastructure, whether that's in the field or as well as kind of in the home office to that hybrid structure. I see.

[00:07:13] I see. And I think that word infrastructure is really looming large for the independent broker dealer sector, where you have a lot of advisors, it seems, who are thinking about getting some more resources and home office support as they do help those assets flow to the independent channel at the same time. So how has your sort of value proposition that you communicate to advisors shifted in recent years? And what trends have you seen out there that would, you know, make Ameriprise more appealing to to maybe some fee only advisors who who might consider a reverse breakaway move, as we call it?

[00:08:04] Yeah, no, it's it's a great point. And, you know, you think about what's going on in the world and we live in a world with a lot of complexity, whether it's the evolving technology market, regulatory market, demographics, everything that's coming at practice right now.

[00:08:18] And the more and more, as I'm traveling the country having meetings with prospective advisors or just advisors or, you know, just confused with all of what's going on, the theme of simplicity has never been more apparent.

[00:08:32] And what I see is advisors who are much more focused on looking for solutions to take that complexity and really get to the other side of that complexity in finance, you know, not necessarily simplistic in a sense of not having comprehensive solutions, but really buying into an ecosystem that's going to translate into true alpha for them in terms of from a regulatory side, from the technology side, from helping me lead my staff and serving my clients and all of those things. And that's where I think as we really evolve the Ameriprise value proposition, I mean, that's where our value proposition is entirely built around and centered around. You look at our productivity numbers, you look at the average asset growth, it's it's really all about how do we help the advisor find that simplicity and execute and really do the things they really love. And in that kind of gets back to the you know, where I've seen some of the W the 10 99s of the business actually moved to the W2 side.

[00:09:29] Well, it's it's something to to keep close watch on. And as a publicly traded company we get to, we are privileged to keep a close watch on Ameriprise and everyone's always very interested. It's a competitive marketplace out there. Just from a headcount perspective, we mentioned the the record client assets. But from a headcount perspective, it's it's been roughly flat this year. I think that's fair to say right now. Is that.

[00:09:59] Is that something where Ameriprise is kind of focusing more on recruiting larger, more established advisors or being more selective on potential recruits or or how would we read into that?

[00:10:11] Yeah, I think for us, I mean, certainly we we keep close tabs on the numbers and and an adviser in our system is not just a number. We have a much deeper, closer relationship to our advisors. And I think as I look across, especially the independent spectrum, as it relates, you know, you think about average ages of advisors, retirements, unfortunately, in some cases are going to have deaths and disabilities and all of those things with a system of our size.

[00:10:42] It's we have that constantly throughout the year. And we're gonna have some people who will actually leave for competitive reasons. And it's it's a potpourri of reasons as to why someone decides to leave. But ultimately, yeah, at the end of day, we're looking to have not necessarily the biggest system of advisors, but the best and have the strongest relationships with our advisors and helping them really execute their business plan.

[00:11:06] Yeah, absolutely. And I think one of the recent announcement that that advisors might have noticed something that that we've been paying attention to as well. But I think it's likely a different part of the firm, but something we're seeing around that space and that is banking services. Ameriprise has just launched a bank. And last week announced the launch of some credit cards with Visa.

[00:11:36] Tell me about that.

[00:11:37] And how do you think advisors, you know, might might look into some of those banking capabilities and their practices to help clients?

[00:11:46] You know, there's no secret to this. You look left and right to the right in our industry. And bank owned wealth management firms are absolutely out there competing for share in the wealth management space. And I think Ameriprise recognize the fact that not having comprehensive banking solutions under the Ameriprise wrapper was probably a gap that we wanted to fill it if it made sense to fill it. And as we saw the regulatory environment changing and capital requirements change, we made the Fouray kind of back into it. So we actually used to be in the banking business probably maybe seven or eight, maybe even 10 years ago.

[00:12:23] So I think advisors are very excited about having another another tool in their tool chest with banking capabilities that when they're out there having to compete, whether it's for mortgages or deposits or for even the sticky relationships around cards, having a bank allows you to do that and be more flexible and control more of the client experience around it. But I think the big delineation is we are not a bank owned wealth management firm. And that's something that I think is the big delineation. And so we'll provide those solutions. But it's not going to be necessarily the tail wagging the dog as it relates to how will operate such an important point to make.

[00:13:11] Why don't we go shift to the latest recruiting announcement from your team?

[00:13:17] I believe last week is well, but this is a team that moved officially last month. Advisors Bill L. Eldridge and Don Del Monte of Malton, New Jersey based First American Financial moved over on to your franchise channel. Just last month, they have a team of three client service associates and their team manages about $160 million in client assets. So a significantly large team. And they came over from LPL Financial with earlier years at LinkedIn and a career spanning more than 30 years.

[00:13:59] So you know what made them a good fit for Ameriprise? And, you know, what do you think were the key reasons they chose Ameriprise?

[00:14:07] Yeah, I like to say it's because they had dinner with me when they came to Minneapolis. But it wasn't it wasn't it was it was terrific to get to actually spend time with Bill at that sort. They were making their decision and they were very thoughtful about their decision to make a move and to ultimately come to Ameriprise. And I think it was a lot of things when it came down to it. It was culture, capabilities and resources. I think Bill and Ed been in the industry, as you said, a long time. And they've also been a number of independents in their last firm being one of the largest independents. And you know, what they shared with me is just a lot of frustrations, a lot of promises made, not necessarily promises kept as it relates to trying to build, you know, a team out, trying to achieve scale, to really execute what their business plan and vision was for the business. And like a lot of independent advisors, while a. A lot of firms will represent that they have the tools and capabilities to really deliver. They felt like they just it hadn't happened before. And when it really came down to it was, you know, could we help them really build out their team? Can we help them really execute on their next level of growth? Is there also they were succession was something that was on their minds and they were thinking about how do we bring in more scale and more more people into the business as they're thinking about operating over the next 10 years.

[00:15:30] And so we're thrilled. The builder decided to their team decided to come join Ameriprise and we're off and running. It's been busy.

[00:15:38] Well, absolutely. And I can speak from a reporter's point of view that everyone is keeping pretty busy in the industry, that it's tough to keep up with with the movement sometimes. And I know the independent movement and the planning movement have been building for really decades.

[00:15:58] But I think it's it's accelerating a lot in the past couple of years and we've kind of talked about it.

[00:16:05] I like the word you used a potpourri of reasons.

[00:16:08] It also reminds me of something this speaker said at a conference. I went to in that if you talk to one adviser, you've talked to one adviser, meaning there are many different perspectives among advisers.

[00:16:22] And that's partly what makes it such an interesting bit to cover for me as a reporter, but also makes your job more difficult as well.

[00:16:31] But just in general, you know, what are some things that maybe some departing advisers have have said or pointed out if you do have an adviser who opts to go elsewhere?

[00:16:45] As I said, it's something that happens all the time, especially among the larger firms in the space. You know, how do you try to compile that feedback and come up with some actionable solutions from a lookback perspective? If there are teams who decide to affiliate with another firm.

[00:17:06] Sure. It begins with creating a culture of listening. And so you're right. Ameriprise have been doing this for decades. I mean, they weren't we just celebrated one hundred and twenty fifth year. And it's we pride ourselves in listening to our advisors. And we've got we have advisors who've been with the firm for close to five decades, which is almost unheard of in our industry. And I think a big part of it is it's that when you talk about creating a culture of listening, it also then has to be action. And we have a national franchise advisory council, which is elected by our advisors to represent them on all company policy issues, things that we're thinking about, strategy. All of those you know, it's kind of where we're headed as a firm and we bring a lot of structure and rigor. And it's not something that it's just a a quote unquote, input counsel. This is a real important part of how we run and operate the business. But from time to time, you're right, we're going to have some people that we're gonna make a decision to make a move. And I think there is a, you know, a number of reasons that are out there. They're usually competitive ones if someone's staying in the industry. And so those are those those will happen. And sometimes our value proposition won't speak as loudly as as as it should or could. To every adviser. And they'll make decisions. And, you know, we support them in their decisions. And obviously, we feel really good about our value proposition. And obviously we have a lot more you know, our retention levels are still at it, industry leading rates.

[00:18:38] I see I see it from an experienced advisor perspective. I think we do see some movements between independence, like the team we talked about earlier. But I think there's a lot of emphasis and focus on the breakaway advisers, the ones who are at regional or wirehouse firms, and they're looking to come to the independent space. There are more and more options for breakaways every year and maybe even every month. It seems that the platform providers and consolidators are really pitching to those breakaways as well. How do you approach that, that group of of breakaways and try to differentiate a bit between the growing options that are that are out there for. For the experienced advisors?

[00:19:32] Yeah, you're exactly right. The captive or W2 side of our industry over the last number of years has not been growing as rapidly as the independent side of the business. And so there are more and more wirehouse breakaway advisors thinking about making a move. And so the first thing I tell people who are at that intersection of it made a decision. They're leaving their current firm. Then it just a question of where am I going to go? What I tell people all the time is you want to go to an adviser centric firm. So as you know, looking you know, you're going through our numbers, 80 percent of our revenues come from things that advisers do. So you want to go to a place where wealth management and serving advisors is not a, you know, a small component of their business. It is the core part of their business. Ameriprise obviously hits a know pretty direct check mark in that in that column. You then think about do they have the size and the capability and the scale to reach able to help you navigate the industry. And that's again, where, you know, check, check, check on some of those elements of it. And then it actually gets into a little different part of it, which I actually encourage advisors to go to a firm that has multiple platforms for affiliation.

[00:20:48] If a firm only has one way to affiliate, that's all they're thinking about, the fact that we have a W2 Channel Ten ninety nine channel, we have even the financial institutions group as well as multiple ways to affiliate underneath that. It's a great check and balance on each one of our systems. So if our W-2 system gets really constrained and very captive, everybody would go over to the ten 99 side of the system. And if the ten point nine system is just, you know, it doesn't have necessarily it can't deliver on all the support parts of a value proposition. They would all want to go into a more supportive network and our W-2 side of that. So those are the things where I always encourage advisors to go. If you're gonna go make a move and break away. Not necessarily that you have to go fully independent. You actually may want to go into a more entrepreneurial W2 business. And there's not too many business models like that out there. Ameriprise is one of them. The last thing that I would say, Tobie, around that making that decision is joining a firm that really has a point of view on the future. And when I say that, you know, obviously we've seen a lot happen just in the last month, month and a half in terms of pricing in our industry.

[00:21:58] And we would be talking about pricing in general just in terms of, you know, fee pressures and all of those things. But to me, if I'm an advisor and I want to be in this business for the next decade or two decades and beyond, you know, have that proverbial runway left in the industry. I'm thinking, am I going to be joining a firm that has a very clear point of view around how this is going to play out and where I should be kind of conducting business or transitioning my business to really take competitive threats and turn them into opportunities. And as I look around this industry, I don't see a lot of firms really with a strategic point of view on how they're going to support advisors over the next 5, 10 years to kind of take that high ground and convert those threats into opportunities. And I think we are we're successful in articulating that to advisors. And so in addition to, you know, some other things I mentioned in terms of firm culture capabilities, all of those things. I think having that strategic mindset is is also really important.

[00:23:03] Yes. Absolutely. I can see that. But what if what if an advisor were to say and this is something that a lot of firms in the space are looking at. I believe Ameriprise is looking at looking at a far earlier than than a lot of firms. But what if the advisors were to say, well, by far the vast majority of Ameriprise, this business comes from wealth management. But you also have a substantial asset manager and an insurance provider. You know, I would rather not be affiliated with any products. You know, how would you how would you address that through the, you know, the business development process?

[00:23:43] Yeah, I think the first thing is choices is table stakes. And we don't live in a world where there's any proprietary bet, library focus or anything that comes close to that. And so. You know, you look at our various options, whether it's investment options, insurance options or anything else of products that we manufacture, that's not even you know, there's there's there's plenty of of third party options. The fact that we have more or just I think we're one or two with the most number of CFP is in the industry shows that you could do fiduciary financial planning and feel very good about it in terms of client satisfaction, client trust and all the different marks that we have. And so as advisors may have that maybe perception of who Ameriprise is. I mean, a lot of that stems from probably decades back as a start to, you know, whether it's coming to Minneapolis or they just go through the due diligence process. They realize that there's a lot of investment choice, a lot of different options out there. And the other part is they also realize that having a strong and stable company is a good thing. And so having a diversified business model, especially as when you get into at some point we will. It's just not if it's when we get into choppy markets, having a diversified business model is a good thing, not a bad thing, because you want to have a firm where you actually have some diversification, your revenue model, that that's going to make sure you're you're on a ship that's not taking on water.

[00:25:08] And I'm I'm sure we'll be seeing a lot more movement in that regard if we do have more chop, if we have some choppiness in the long running bull market.

[00:25:19] I think we could probably see even more M&A deals than we already are, which is at a record. So certainly something to keep watch on. This has been great. We're nearing the end of our time. But I want to wrap things up in the same way I do for all of our guests here on financial planning podcast source media is our parent company. We have about 30 financial services publications here. Our flagships are F.P. accounting today, American banker and bond buyer. As a company, we strive to help advance professional communities through our independent journalism. That's our little motto. But I like to ask this to all my guests and that in your opinion, you know, how can the independent financial planning profession advances it as a community?

[00:26:15] What would you look for in terms of progress? When we look at this group of financial advisors who are kind of reshaping the industry with all the changes taking place up there?

[00:26:30] Yeah, that's a great question. And it could be a whole nother podcast. But what I would I would probably keep it short. Toby, you just say that I think we you think about a lot of different industries that are that we all know as consumers see out there. And there's been a lot of disruption in a lot of industries. And I don't think we will be immune from it here in financial services. And, you know, I we say this all the time, which is instead of being disrupted, why can't we disrupt? And I think I think in order to have that outcome, you have to be you have to be innovative. You have to be not defensive and sticking into a business model. I think we have to kind of push ourselves, you know, really to some uncomfortable places in our industry to continue to progress and get better. I think we've made great strides when you think about technology and how he's to engage with clients, just so many different aspects in terms of the regulatory good that has happened over the years in terms of delivering a better outcome for clients, more cost effectively. But I still think that we will continue to there's still much more for us to do and to innovate and to progress in this industry. And I think we just have to have the the courage to continue to stay aggressive and have a sense of urgency to push our business model forward. And I'm looking for the Ameriprise is on the forefront of that, and I'm looking forward to continuing to help to move us in that direction. Excellent.

[00:28:04] Well, Manish Dave, thank you so much for being here and hope to talk to you again soon. Absolutely. Thank you.

 

Written by Kevin Daly

Founder of Value-Ad