Some credit unions and banks are offering recruiting incentivesto financial advisers that guarantee prior year's earnings forthose currently producing in the $500,000 range.

That's according to a new survey, Recruiting Packages forFinancial Advisors in Banks and Credit Unions, from researchfirm Kehrer Saltzman & Associates and sponsored by Cetera Financial Institutions, a broker-dealer and registeredinvestment advisory company.

Taking a look at 11 plans at 30 firms, KSA analyzed theadviser's total earnings, earnings compared to the prior year,total adviser payout percentage and the firm's breakeven pointafter overhead expenses at various levels of a recruit'sproduction.

“What is most encouraging is the profitability break-even pointfor the firm with many of the incentive packages is veryattainable. The key is in the incentive design,” said Peter Bielan,a principal of Kehrer Saltzman in Charlotte, N.C., and projectdirector for the survey.

Among the survey's highlights was a clear and conscious effortto pay for the adviser currently doing the type of business the firm wanted,and in many cases either past or anticipated advisory business hada role in that payment, said LeAnn Rummel, executive vice presidentand national sales manager of Cetera.

Those firms that have designed recruiting incentives to addresswhat matters most to advisers also had an edge, particularly luresthat noticeably distinguish themselves from the common industryrecruiting packages according to the KSA study.

“The standard $40,000 base salary and 40% guaranteed payout isno longer competitive,” KSA noted.

“With our industry benchmarks demonstrating that the client baseof financial institutions can support up to twice the number ofadvisers than are in place today, the firms that are aggressivelyadding profitable incremental advisers are going to outpace thefirms that are trying to get all of their growth organically,” saidKenneth Kehrer, who participated in the analysis of the study.

He added, “The firms that have the most effective recruitingincentives have made a solid business case and have won the fullconfidence of the parent institution's executive management intheir hiring ability.”