WHY HIRE AN AGENT
WHY HIRE AN AGENT
It is interesting that high earners like movie stars, athletes, even some public speakers and authors all have at least one thing in common - they all have agents. An agent by definition is “a person who acts on behalf of another i.e. a broker or representative.”
The reason for the agent, among other things, is to help navigate the myriad decisions that these professionals will face in business. The rationale is sound: Bring in a neutral third-party who is there to maximize profit, minimize risk, and minimize the potential of poor decision making. Ironically, financial services professionals, people who work as agents advising and guiding the investment decisions of their own clients and who as a profession are some of the top earners in the country, have not historically retained an agent to represent their interests when making career decisions.
Even home buyers retain the services of real estate agents to ensure that they understand the market landscape, maximize the time spent looking for and selecting appropriate properties, and negotiating the best possible deal. Financial service professionals rely largely on two resources for information when making transition decisions: recruiters and employees of firms under consideration. Recruiters have allegiance to the firms who pay them to deliver revenue generating producers with successful books of business. Recruiters have no allegiance to the professionals they seek to place. Employees of firms trying to woo financial services professionals to join their firm are being paid and evaluated on the number of hires they make. Financial services professionals can burn thousands of hours meeting with firms, attempting to weed through the differences in the alternatives available or even identify those alternatives. Given the confidentiality concerns, finding avenues to get impartial and factual feedback regarding available alternatives can prove challenging.
Firms offer what appear to be compelling transition packages to financial services professionals. However, the tax implications and the less than advantageous nuances of the deal structure are not necessarily readily apparent. The number of financial services professionals who lament their deal post-signing once the real implications hits their wallets is staggering. The aid of a qualified accountant and industry savvy lawyer to interpret these contracts in advance and negotiate a more favorable deal would avoid these scenarios.
Prior to 1975, the average salary in professional football was $30,000. There was no such thing as free agency and athletes were at the mercy of the team owners. The owners make their money off of the players. Without players, there is no revenue and thus no profits. When draft pick Steve Bartkowski was at a contract impasse with the Atlanta Falcons in 1975, he reached out to a college friend named Leigh Steinberg. Steinberg got the now-defunct World Football League to bid on his services, forcing the Falcons to pay record $625,000 for a rookie signing. Steinberg went on to become one of the most successful agents in the business. Players by and through their agents shifted the balance of power placing the leverage where it belonged with athletes – the ones actually generating the revenue. Ironically, this shift has yet to occur in financial services. The financial services professional brings in the clients and provides the advice and recommendations which result in fees and commissions to wealth management firms. The firms would not have revenue or profits without the advisors and brokers. So why is it firms dictate the terms and structure of transition packages? Why are deal terms uniformly applied with little to no recognition of the professional’s individual strengths and talents? Knowledge is power and leveraging the experience, skills and talents of a representative whose sole focus is the career advancement and success of the financial services professional client will change the way negotiations occur and the results achieved.
CAREER MANAGEMENT ADVISORS is the only professional representation business with the experience and expertise to provide counsel and advise to advisors and financial services teams considering a change.