There’s a double-edged sword for dealer group owners who poach the head of a competitor’s dealer group.
In the back of their mind there will always be the fear that a few years down the track when the new head of the group steers the company from obscurity into success, some other dealer will come along and poach them.
On the other hand, if your general manager isn’t getting calls from other groups wanting to lure him/her away to the dark side, then they are probably not building on their own — and ultimately the group’s good name and reputation as a success.
Call it a nasty dilemma, or the nature of the beast, but the point is not lost on headhunters in the financial services industry, nor on the board members of dealer groups searching for new ways to claim market share.
ING’s head of equity distribution, Mike Goodall, certainly agrees. ING’s seven dealer groups report to Goodall, who also has the responsibility of making sure each dealer group is being led by the right manager.
“I’d like to think that not a month goes by without one of my general managers getting a phone call from a headhunter or a rival financial planning dealer group,” Goodall says.
He says that if his managers are indeed getting such calls, this is a healthy sign for the business overall, and it also tells you they are doing their jobs properly.
“I would really find it a surprise if one of them came to me and said, ‘sorry Mike, I’m going to work with someone else’. These are the sorts of issues that I would expect to address before they become issues,” he says.
He says that to keep managers within the fold, there are the obvious issues such as benchmarked pay and work conditions to keep in order, including bonuses and salary options, but by far the strongest driver is the relationship between himself and his managers.
“I saw a statistic that the majority of managers leave a company not because of pay or conditions or because of a new opportunity, but because of the relationships they have with their up-line manager.”
And it’s precisely these happy dealer group chiefs that headhunters are targeting.
Financial Recruitment Group’s Sydney executive director Peter Dawson, says once a client signals it wants to fill the head position at a dealer group, the firm contacts various top dealers in the industry and tries to interest them in the job.
Surprisingly, he says, the ones happiest with their jobs more often than not are the most curious. Some of them might go as far as meeting with the client to find out more about its strategy, all the while reserving their right to pass up the opportunity at the end of the day.
“Most are very happy where they are. These people are the ones we’re chasing,” he says.
Dawson estimates between 80 and 90 per cent of successful candidates filling each position are found through word-of-mouth rather than by advertising, or trawling through databases.
“Executive search is very different from advertising,” he says.
As for what qualities someone suited to head up a dealer group needs, ultimately these are determined by the client, and also by the size of the group.
“Generally we look for an experienced manager from another group, although occasionally you might get a business manager from outside the financial services industry. They need to be on top of legal issues and compliance, but above all, have good people managing skills.”
With the changing regulatory landscape demanding qualified advisers with MBAs or diplomas earned from the tertiary level, university education is now almost a given, although there might be a few veterans in the industry who were schooled on the front lines at emerging dealer groups in the 1980s.
Garrison managing director Kim White is one such veteran. White studied health science at university, but soon found out he didn’t like it, and wound up working on administration systems for 3M for seven years after leaving university. While there he became acquainted with an accountant who invited him to work in his accounting practice in 1988.
“I virtually fell into financial services. The experience I got with my employers down the line, like National Mutual, was invaluable. Places like these were the best schools you’d want to go to, to get a start in a dealer group.”
White built up his experience as a financial planner, but he says it was his background in computer systems gained early in his career that also helped him win his current job as head of the Garrisons dealer group.
“While the experience of being a financial planner is certainly a help, being on the other side of the fence in mainstream business gave me an insight into how tough business can be and taught me to be very business focused.”
Incumbent managing director John Sikkema sought out White, who was working at Summit Master Trust, to take over as new managing director while he stood aside to become chairman. Interestingly, Sikkema is not in favour of using headhunters, preferring the direct approach, according to White.
But whether a dealer group head is lured away by the direct method or via a recruitment agency, targeted candidates for such positions need to cultivate a strong profile.
Carlie Gould, management consultant at Crowe Associates, says maintaining one’s profile in the market is crucial if a manager ever wants to be headhuntable.
“You’ve got to have a reputation for technical excellence, and join professional organisations and industry bodies,” Gould says.
“You’ve got to have built up good relationships with your own peers and others throughout the industry. You need a high profile in distribution, and maximise your exposure to the media. The best of these have clients asking for them by name.”
She says clients use headhunters rather than the direct approach because there’s so much time inevitably spent in searching for the right candidate, which would be better spent by professionals who do this as their vocation.
“One client told me he spent 160 hours interviewing for one position. How can anybody find that time these days?”
She says salaries in this area of the industry vary, but $250,000 could be what you’d expect at a larger group. Gould says she has seen paypackets for this job range from $180,000 to $1.2 million.
“The sky’s the limit,” she says.
