Essay: Brokers Long for Days When Managers Protected Them
About 15 years ago Janney Montgomery Scott branch manager Ed Robinson found himself in hot water. He had recruited a broker who had greatly exaggerated the commissions he generated at a previous broker-dealer, and the firm wasn’t happy about it.
That’s where Ron Berardino, Robinson’s manager at the time at the Garden City, New York, complex, came to the rescue.
“They were looking for someone to hang out to dry and he wouldn’t let them do it,” said Robinson, who has been with Janney for 22 of his 40 years as a broker.
Advisor Chris Young, a principal at Cassaday & Company, a McLean, Virginia, firm affiliated with independent broker-dealer Royal Alliance Associates, says he learned the business from the bottom up courtesy of the firm’s founder, Steve Cassaday. He never resented that he was a go-fer one minute and a vital aide the next.
“I was attached at the hip and did everything that he did,” said Young, who began as an intern during college, was hired on graduating, began working with clients after three years and is now in his 16th year with the firm.
“I did everything from picking up his dry cleaning to (handling) the technology and research.”
Lots of veterans credit mentors and protectors such as Berardino and Cassaday with spurring, or even saving, their careers. But managers who used to show brokers the ropes, encourage their successes, constructively criticize their gaffes and grease the skids to meet client demands appear to be fewer and much farther between.
With field managers being transitioned from coaches, recruiters and protectors of their brokers — not to mention culture carriers — to overworked orderlies carrying out policies originated in corporate headquarters, the environment has changed.
At the same time, opportunities for rookies to obtain personal mentoring have dwindled as firms cut back on training and move neophytes as quickly as possible into branches to work as specialized team associates with questionable career tracks.
“As a manager, you used to have your finger on the pulse of everything going on in your branch, including your P&L and legal, and you had control to affect change,” said Michael Maurer, a 23-year industry veteran who has managed at branches for Morgan Stanley and Smith Barney/Legg Mason in Washington D.C. and Albany, New York.
The “enormous resources” firms used to devote to leadership training programs also dried up after the financial crisis and have not returned, said Maurer, now an an industry consultant.
He fondly remembers how his own mentors, including former Legg Mason Wood Walker Chief Executive Jim Brinkley, “made you feel like you were the only one in the room, how they cared” and taught.
Brinkley, he recalls, passed on to his own managers the “Platinum Rule” that prescribed “treating people the way they want to be treated — and better.” Today’s managers are hard-pressed to find for daily conversation, let alone to celebrate personal and family accomplishments, Maurer said.
One of the chief culprits for the cultural shift is consolidation, leading to managers supervising far more staff than they used to. “There is no human being on the planet that can devote the individualized attention that we used to,” said Maurer, who saw his own direct reports at Smith Barney swell from 60 advisors to a staff of more than 400 after the financial crisis in 2008.
“The division between management and labor is greater than I’ve ever seen,” said a Morgan Stanley broker in the Southwest who has been a registered rep for 30 year. “They’ve pretty much killed any loyalty, and local management is completely impotent.”
To be sure, some large firms say that they are addressing the dissipated attention span of managers by cutting bureaucracy.
UBS AG boasted during its second-quarter earnings call last week that average productivity of its almost 7,000 brokers grew 14% over the past year to $1.23 million due, in part, to bringing “decision-making…closer to clients, FAs and branch managers” as a result of a reorganization that eliminated scores of regional and branch-complex managers and support teams.
The jury is out on whether such slimming actually gives brokers more autonomy rather than further cuts support. The U.S. brokerage arm of the Swiss banking giant reported a 17% jump in pretax profit but said profit margin was flat while customers withdrew a net $6.4 billion from their accounts during the second quarter.