Broker Job-Hopping: The Chase for More Dollars

We Need to Talk... "Lured by rich compensation packages, a growing number of brokers are switching to rival firms... Brokerage firms ... are offering some brokers as much as 150% of the commissions and fees they generated in the final year with their old firm... That figure can jump to as much as 200% when stock and other deferred compensation is factored in."

Whoa. Don't get excited. That's stockbrokers, not real estate brokers. The Wall Street Journal is actually writing about the New York Stock Exchange's recent warning to investors about potential conflicts when stockbrokers switch firms. (May 25, 2006)

But the article got me thinking about real estate brokers because Dispatch subscribers frequently ask me to change their address when switching firms. It's a simple request, but can trigger painful memories -- back when I managed a real estate office in San Francisco (a dozen years ago!).

NOTHING increases the heart rate of a manager as that time -- usually at 4 p.m. on Friday, after most of the office has left -- when a broker walks into your office, shuts the door and begins with the fateful words, "We need to talk..." It's all downhill from there. Trust me.

According to the WSJ, stockbrokerage firms try to reduce switching by deferring compensation "usually in the form of company stock that would vest over several years." Departing brokers would therefore forfeit their "deferred-compensation package." Oops.

But that strategy sounds unlikely to work in commercial real estate. Right? So what's the best way to prevent brokers defecting from your firm?

Spread the Word... Thanks to the REALTORS® Commercial Alliance for sponsoring the Dispatch this week! If you would like to tell PikeNet subscribers about your service, send e-mail.

-- Peter Pike