The layers of wirehouse (and regional) management continue to shrink. Across the wealth management industry the least popular and least secure job in the business is regional and branch management.
The reasons behind the truth of the above statements are many; but the consequences, both personal and professional, are striking.
When looking at the numbers connected to the shrinking scale of management in what used to be called ‘full-service’ firms is truly alarming. Everyone in the industry bemoans the death of ‘middle management’ at the Merrill Lynch’s and UBS’s of the world – but the truth and pain felt amongst the individuals that are connected to those positions is very real.
One specific dynamic connected to both the shrinking scale of middle management as well as the extraordinary stress associated with it is this: the ticking clock every Friday and long weekend on the calendar. Every manager at every branch and regional post watches the ‘tick, tick, tick, tick’ on the clock on their iPhone.
For the last decade management compensation at these firms has been directly tied to recruiting and retention. A direct line can be drawn to managers who get fired and those that get promoted to recruiting superstars from competitors, and losing their biggest teams to rival firms and managers across town or a floor or two up or down in their same building.
It has been a stress laden exercise and career roller coaster for so many. One wonders why so many competent men and women in the industry both chose this career path and have stuck with it given the writing on the wall?? (Money may have something to do with it – but a case can be made for work/life balance here.)
Recruiting PTSD is very real within the industry. And let me show you what it actually looks like. Branch manager X is on the cusp of landing a $2MM team but at the last moment loses them to a rival. Six months later Manager X loses the biggest team in his office. Manager X becomes a Managing Director at his firm and is told to ‘build a book’ of business in the next year as his performance is evaluated (when he hasn’t had a client in decades). Manager X is removed as manager, stays at his branch, hoping to gather accounts that advisors that used to answer to him don’t want and pass off to him. Another year goes by and former Manager X can’t build a book fast enough to make a living and exits the business, finding himself selling insurance/annuities to make ends meet.
His decades long industry reputation is sullied, his finances are in tatters, his marriage and family are aggressively disrupted, his career arc forever destroyed. In one particular case, the above played out in a way that ultimately ended in a wirehouse manager committing suicide. A suicide that left behind a wife, teenage kids, mother and father, friends, and a life that will never be lived. Absolutely tragic.
Every manager that reads this will know exactly of which we speak. A Friday afternoon that finds him or her staring at the wrong resignation letter could lead to career destruction – and they know it.
Here is to hoping that the current movement to de-emphasize recruiting as the ‘end all be all’ metric is permanent; and that branch profitability becomes what matters. Eliminating recruiting PTSD could save a life – literally.