Seth’s Blog on Finance

How Recruitment is Done in the Financial Services Industry

I did some random Googling and came across 5 recruitment adverts from different companies and firms within the financial services industry. This is how recruitment is done in this industry:

All the recruitment managers have to do is to meet a number of people and tell them how lucrative the job is, proving it by showing off their pay cheques or branded cars, and they can probably get a fraction of these people on board. Seeing as to how one must be very persuasive to be able to sell insurance policies, especially lousy products, you can only imagine how persuasive someone who has risen to the post of manager can be.

For every 10 people they manage to recruit, perhaps 7, 8, or even 9 of them cannot survive for long in the business. No matter, they will start off by selling policies to their friends and family, and the manager still enjoys the overriding commissions he receives on these sales. Moreover, when they drop out, the trailing commissions will just get absorbed by the manager’s agency.

New agents will invariably be tempted or encouraged to buy cars, locking them into financial commitments such that they have no choice but to sell, sell, sell.

Those who remain and become adept at selling will soon require less guidance, and the manager can just go see another number of people and the process repeats, enlarging the number of agents and hence the overriding commissions the manager has. The more successful agents themselves can also become managers, elevating their own manager to director and thus ever enlarging their agency where all of them make a fortune at their poor clients’ expense but still somehow believing that they are doing right by their clients. (Of course, not all of them are naive enough to not know that what they are doing is at the clients’ detriment. I’ll give a certain person the credit for being honest when he dropped the pretense of being ethical and telling me where his real priorities lie.)

What a wonderful business model!

My colleague (who as of 2012 has left the business) and I are probably crazy, responding to a different advert instead:

Under my team, you cannot be assured of hitting the Million Dollar Round Table (MDRT) simply because exceeding a certain level of commission is never our target. I am not interested whether you sold a term insurance or an ILP. I am more interested that your recommendations have benefited your clients. If you want to earn a large income, this place is not for you. You will do better in firms and agencies that push products to the detriment of their clients. On the other hand, if you want to help others, this place is for you.

Do I need a psychological assessment? Hmm…