SOURCING CANDIDATES FOR BANK INVESTMENT PROGRAMS - A PROCESS, NOT JUST AN EVENT
Paul A. Werlin

Paul A. Werlin is President of Human Capital Resources, Inc, a consulting, recruiting and training firm focused on the bank investment channel. He is based in St.Petersburg, FL and can be reached at paulwerlin@humancap.com. This is the first in a series of six articles that will focus on recruiting and retention of Financial Advisors.

Every sales manager leading a bank investment program has a pretty good idea of what needs to be done to bring new reps into their program. First, find qualified candidates (or wait for them to find you), screen the "prospects", and convert those that pass your preliminary screening into "candidates." Second, bring the candidates in for an interview, perhaps including your immediate superior, someone from HR or others, conduct reference checks and verify production. Maybe conduct a second interview and finally make an offer which hopefully will be accepted. Pretty simple, right? Wrong! The entire process of finding, hiring and retaining top-tier investment representatives is not simple or easy. Particularly in today's uncertain economic environment, bank investment programs are competing with other bank programs, wirehouses, independent firms and now, RIA (registered investment advisory) firms for talented producers.

Because of this market instability, the recruiting picture right now is somewhat better. Wirehouses have been letting lower-producers go (typically, those doing less than $500,000), and firms like AIG that own B/Ds and/or RIA firms have seen massive departures (as have some of the more publicized "troubled" banks). But, the current situation will not last forever. Some banks are still finding it difficult to find good candidates in smaller markets, and the cultural divides wirehouse reps must cross to fit in a bank program are still significant. While recruiting isn't exactly rocket science, it does take time, effort and a comprehensive plan to do it right.

When putting together a total recruiting plan, the first thing a program manager must remember is that financial advisor recruiting is a process, not an isolated activity to be done only when there is a seat to fill. By treating recruiting as a process, managers will have a pipeline of active candidates available if and when a position becomes available. And filling this pipeline starts with sourcing qualified candidates.

Develop a Candidate Profile

Sourcing the right candidates is where the entire recruiting process starts and is perhaps the most important and time consuming. It's like that old saying about computing - "garbage in, garbage out." It's well worth your time to think about the skills, talents, experience and personality of the people you want to become a part of your team. Developing a "candidate profile" is a good place to start. In addition to including the usual items information such as licenses required, education level, etc., also include items that are important to your specific program such as product mix, building business activities, and ability to interact well with branch staff. The profile you develop serves as a blueprint for you and HR to use when screening applicants. Once you have your profile and everyone involved in the hiring process understands who you're looking for, you can target the right candidates with your message.

Sourcing the Best Candidate

To start sourcing candidates you first need to differentiate between "active" and "passive" candidates. Active candidates are those who are proactively seeking employment. They're the ones sending unsolicited resumes and calling for interview appointments. Typically, they are not currently working, not happy where they are, or expect to be unemployed in the near future. Passive candidates, on the other hand, may be quite happy with their current situation and employer. They may also be top producers and susceptible to your recruiting efforts because of some change in the program or their circumstances. For example, if their payout was just reduced, or referrals have dropped, they may be receptive to new opportunities. With passive candidates, the key is to be there when those circumstances change. Managers need to get their message out to both active and passive candidates to fill their candidate pipeline.

Getting your message out to targeted candidates is at the heart of sourcing. Just like prospecting for clients, the key to sourcing is using multiple methods targeted to the people you're most interested in attracting. Finding both passive and active candidates means using every available method within your budgetary requirements.

To be most effective, two approaches to reach potential candidates are best. First, nothing beats picking up the phone every day and calling top reps. Even if they are not interested, circumstances can easily change, and that top rep that showed no interest one day, may be very interested in talking to you the next. You can either purchase lists of brokers in your markets or simply call bank programs or brokerage offices and ask to speak to a broker. Building rapport with top producers in your market should be a part of every manager's job, and will pay off in the long run. You never know when they may decide to make a change or they may refer someone to you. The second method is building a referral program with your existing team. Your reps, branch managers, and others know top reps themselves or have contacts - accountants, lawyers, business owners, etc., who do. Implementing a solid internal referral program with meaningful incentives is an excellent way to source good candidates. To get meaningful participation, incentives need to be high enough to encourage your people to make the effort. I've seen incentives range from $100 at the low end to as high as $5,000. Managers need to find incentives that will motivate and are within their recruiting budget.

In recent years, the internet has gained importance, becoming the most cost effective way to source candidates. It's relatively inexpensive, has world-wide reach, is available 7/24, and from the candidate's perspective, it's anonymous. There are three main ways to use the internet - market through your own website, market though job boards, and social networking. Using your bank's own website to market opportunities is effective, low-cost and simple. Just work with your HR area to make sure your posting provides all the correct and required information. Using job boards can also be effective. Sites like Monster, JobsInTheMoney, EFinanicalCareers.com all have rep job postings. There are also sites specifically for brokers search such as brokerhunter.com.

Social networking is one of the fastest growing areas of the net. Sites like LinkedIn, Facebook, and Myspace allow managers to network among people with the skills, talent and experience they are looking for. On LinkedIn, for example, it's possible to find people who worked for specific companies or have FINRA licenses. There are also "groups" on many of these sites that share common interests or experiences that can be targeted. Social networking may take some time for you to find the people you are looking for, but it should not be overlooked as a good source of candidates.

When sourcing candidates, it is important to consider using an outside search firm. Recruiting firms have an extensive database of potential candidates and an extensive network of people in the industry. This, along with saving you and your staff the time, effort and resources of finding talents, are the major advantages of using an outside recruiter. And there is one more advantage - they may make the calls you don't want to or can't. Many managers don't want to start a "talent war" with competitors by openly recruiting their people. Using an outside recruiter eliminates this potential landmine. Of course, there are expenses using an outside recruiter. Costs vary and depend upon many factors such as how quickly you need to fill an opening, and how difficult a specific search may be. Fees can range from as low as $500 - $1000 (for just sourcing candidates) to $10,000- $20,000 for a full-scale recruiting effort. If filling a position quickly is imperative, or you have limited time and resources to devote to recruiting, then a professional recruiting firm might be best for you. And remember, there is a pretty steep cost to having a position open for an extended period of time. Like many management decisions, using an outside resource needs to be looked at from a cost-benefit standpoint.

What about the tried and true method of newspaper Help Wanted advertising? We don't recommend it as a cost-effective sourcing vehicle. Newspapers are closing all across the country. Help Wanted advertising in newspapers has dramatically diminished along with overall employment, while internet job boards have grown substantially.

Product wholesalers and account managers can also be a useful source of potential candidates. They know the reps in their territories, who the big producers are, and frequently, who's happy and who's looking. You need to keep in mind that they must be careful about what they say. They may not want to be in a position of telling you about a rep thinking about making a change. That rep's manager may not appreciate a vendor "facilitating" one of their employees going to a competitor. But, sometimes a rep who is looking has informed their manager, and a wholesaler may be a position to help the rep and you. It's well worth the effort to remind your wholesalers to keep you in mind should they be in a potion where they can help.

Sourcing is all about marketing: develop your profile; find the most attractive targets; deliver a clear and positive message to prospective candidates, and; keep at it. It really is a numbers game. The more people who hear your message, the more prospects you'll find. In this light, I recommend that every bank investment program have a recruiting brochure targeted specifically to rep candidates. It doesn't need to be expensive or slick - just a nice piece that effectively communicates to a candidate why they should want to become a part of your team.

Sourcing is time consuming and at times, frustrating. But if done well, you will be rewarded with a pipeline of quality candidates that you want to be a part of your team.