Abstract
The current need to attract and retain productive registered representatives has led to a bidding war in many retail brokerage firms. Firms often feel coerced to pay signing bonuses to the very people who are the most portable. Turnover has increased as registered representatives “hop” firms annually. Attraction and retention costs have reduced profit margins to below acceptable levels. These losses, coupled with the market’s recent performances, are a lightning rod for executives to improve business line profitability. Firms must build and/or adjust compensation programs that focus on paying those who most deserve it. Firms need not only to customize their compensation programs to react to this reality but also to face some of the newer challenges in the retail financial markets. Firms that seize this opportunity to refine their business will be best suited to increase the productivity of their registered representatives while decreasing overall compensation cost of sales.
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