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Transforming Advisor Recruiting for a Leading Broker-Dealer

At one of the largest independent broker-dealers in the U.S. wanted to change its cumbersome, confusing and outdated recruitment process.

CHALLENGE

One of the largest independent broker-dealers in the U.S. was coming off several years of significant growth, driven primarily through acquisition. Though its advisor ranks had increased substantially, its cost of acquisition had risen at even faster rates. Furthermore, there was a feeling internally and among advisors that the recruitment process was cumbersome, confusing and outdated. Advisors often completed the process and joined the broker-dealer while saying, “I’ll never do that again!” Advisor engagement scores during the recruitment and onboarding process were dangerously low.

The firm had significant recruiting goals relating to numbers of advisors, gross dealer commissions (GDC), and total assets under management. To reach those goals would require substantial investments in new recruiters as well as in internal resources because recruiting processes were so inefficient. The firm wanted to find another way to grow, while also improving advisor experiences.

SOLUTION

ZS mapped out the current recruiting process in detail, engaging with individuals from business development, onboarding, marketing, finance, compliance and other departments. What resulted was a recruiting process that could be viewed in full for the first time—one encompassing more than 40 steps, many months and thousands of dollars invested per recruit, with disappointing yield. The case for change became abundantly clear.

Rather than make incremental changes, ZS worked with the client to rebuild recruiting from scratch, with a focus on the advisor experience. We created new recruitment processes in which recruiters were empowered to make decisions, data collection was minimized and automation replaced some manual efforts. We created new business development roles to improve efficiency and designed new incentives. Finally, ZS helped to revamp reporting and forecasting, augmenting existing data collection and reporting to better understand the pipeline.

THE ZS IMPACT

  • A more efficient process: The broker-dealer saw substantial improvements from the new recruiting model. Time from the initial recruitment outreach to contingent offer was reduced by 25%, and resources required during these stages dropped dramatically. More importantly, the advisor experience improved for the better: Advisors were more satisfied during recruiting and onboarding, leading to positive referral and promoter benefits.
  • A significant revenue impact: Based on the early returns, the rebuild was expected to add more than $10 million in incremental GDC annually. These gains were attributed to increased recruitment volume due to freed capacity, better yield rates from a better experience and faster time to close and transfer assets.