Sirianni: “Entrepreneur or employee dynamic has changed forever…”
The Advisors lament is changing in a telling way. The classic version is similar to the professional athlete’s “When I call it a game you call it a business and when I call it a business you call it a game.” Advisors get tangled with management with “When I call myself an entrepreneur, you call me an employee, and when I call myself an employee you call me an entrepreneur.” The entrepreneur/employee debate seems almost quaint when compared to what’s coming.
The entrepreneur/employee (E/E) dynamic usually centered on roles and responsibilities: that, and money. Firms want Advisors to pick up as much of their expenses as they can because they are entrepreneurs, and Advisors want to be seen as captains of their own ships, but are eager to have the firms pay for as much as they can. This back and forth generally tilts in favor of the firm, especially at pivotal moments like retirement and the annual compensation reveal circus.
This back and forth is eternal. It has been ongoing since before the times when firms lost their cultures. A managing Advisor has always been more akin to being a baseball manager than a football coach. You have individual achievers you must mold into a team. You have to somehow convince the big hitters that playing in the field, and bunting on occasion, is in their best interest as well as the teams. My experience is that a strong culture with a sense of belonging and ownership was the only way to do this. There has always been noise, and if you love this business, you have to love broker noise because it keeps everyone honest. Culture then, was the glue that kept the E/E debates to an acceptable decibel level.
Lately though, the sounds are much more ominous. Conversations between Advisors and management have become more adversarial and more hushed, with management driving processes and procedures designed to cut costs rather than adding services to increase sales, and Advisors grumbling under their breath or in the news. Advisors are voting with their feet and running from frying pan to fire with an “at least I’m getting paid to deal with this nonsense” type of attitude. Without the structure of culture E/E debates are losing steam. Rather, there is little talk at all. An Advisor just paid 300% or one still waiting out a retention deal, like an athlete with a new contract, keeps her mouth shut.
Somewhere, in the sounds of silence, the gears are grinding. With a captive (paid off) workforce, firms are creating handcuffs, golden and otherwise, through deferred comp and annual commission reductions bit by bit. They are moving to take away Advisor rights in arbitration and through sign or else documentation that whittles away Advisor privileges. Many have left their firms because of this. Others wait and say my comp hasn’t changed much…my deferred will be worth something someday….
Good men and women keeping silent is all that’s needed to make the real change that’s beckoning. No firm is hiding what they are doing. Any shareholder would say its in the firms interest. Any Advisor who doesn’t see this on the horizon is blind. The debate isn’t entrepreneur/employee anymore. Its not even a debate. It’s a question. Do you own your book or not? Absent culture and dissent, we are left to draw the worst conclusions.