Strategy ProFormas for Recruiting

Transition packages and net payouts in the industry vary greatly. Most RIAs, smaller IBDs, and independent firms looking for tuck-ins don’t offer much, if any transition bonuses. The larger IBDs will typically offer anywhere from 10% to 80% transition deal. Calculating and comparing the actual total compensation package between firms must include all compensation and out of pocket costs.

We help our advisors compare the Recruiting ProFormas side-by-side on an apples-to-apples basis that calculates the differences in payouts, net payouts, upfront and backend recruiting bonuses, ACAT fee reimbursements, start up costs, office build out and setup loans, monthly overhead projections, and takes into account the recruiting note amortization schedules.

Our Recruiting Proformas break out 10 year projections but also a 12 month projection accounting for different client transition ramp up variables, start up costs, and overhead so you can see how soon you’ll be cash flowing and get a realistic picture of how the financials work out based on a variety of variables.

It can be confusing comparing different recruiting pro formas from different firms. There is not an industry standard pro forma that all firms use to make easy side-by-side comparisons. The quality of these pro formas vary greatly by firm and we have seen more than our fair share of pro formas provided to advisors that understated the real startup and overhead costs or doesn’t account for inorganic growth which may be a primary reason why you are considering that firm in the first place.

Advisorbox can help you compare different recruiting monetization strategies and firm recruiting value propositions, introduce you to the right people, and walk with you through the entire process. Save time, get unbiased consulting, compare pro formas before speaking with a firm, and increase your position of strength by calling Advisorbox at the beginning of your due diligence process.