When Your Employer Just Isn't Your Type
SuperUser Account posted on March 30, 2014
Many advisors don’t understand the variety they have in possible employers. And without that understanding, they often fail to grasp the importance of finding the right fit for their skills and their personality.
When my team analyzes the industry, we identify firms by model and type. There are many models to choose from: wirehouses, banks, regional firms, independents, RIAs, hybrids, insurance companies, boutique firms and discount firms.
We then break up these various models into three types: hunter, gatherers and skinner firms.
Just as the hunters, gatherers and skinners in our ancestry had different roles in the village, success in our modern industry depends on recognizing that each type of firm requires a different skill set.
So what firms make up these three types? Hunter firms are made up of wirehouses, regional firms, independents, RIAs, hybrids, insurance companies and boutique firms. At these firms the advisors are not given any clients, referrals and seldom any leads – unless a manager buys them a list. Success lies in their ability to hunt for new prospects and turn them into clients. At hunter firms, an advisor’s success is determined 100% by their ability to hunt.
Gatherer firms are made up of mostly banks, with a handful of “one-off firms,” like Ric Edelman. Gatherer firms provide something the hunter firms don’t – referrals and leads. Both hunter and gatherer firms provide advisors with products and technology, but the gatherer firms give them someone to close. But not all gatherer firms are made equal. At some, there are simply more leads, as well as access to existing clients. Others make success more difficult by offering fewer referrals and restricting client access.
Skinner firms are mostly the discount firms. These firms take it to the next level and provide the advisors with clients. Since skinner firms usually do a lot of advertising, client acquisition is provided by the firm. These firms just need advisors who can up-sell, cross-sell and service the existing client base. Of course some of them do financial planning as well, but acquiring clients is provided by the firms.
There are many misconceptions in the industry about all three types. Here are a few common ones:
- Banks only sell annuities, have few products, poor technology and cater to tiny clients. Not true—the best banks have almost everything the wirehouses offer. Yes, some banks are still stuck in the Dark Ages, but the good ones have great technology and deep product offering. In addition, some banks have average production of $600,000 to $700,000.