Every day, some advisers choose to put on a new jersey or take the leap to independence. And in an industry that has exploded with options over the past few years, it’s no surprise the movement continues to break records.
Yet despite all the activity, advisors who are on the verge of a change or just curious about their options share some common concerns. So almost two decades ago I started writing this regular episode for WealthManagement.com to dispel “myths” that can block an advisor’s plans to realize their full potential.
So what are the most common misconceptions advisors share these days?
1. “There are no good options for large wirehouse teams.”
As the competition for top talent has grown fierce, most companies have upped their games like never before.
For example, it often feels like “all fulfillment centers are created equal,” but in recent years, these companies have expanded their range of offerings for ultra and high net worth clients and the advisors who serve them. With enhanced multi-family office resources, access to private investment opportunities and more, they are investing heavily in their platforms to deliver greater differentiation.
Likewise, regional firms like RBC, Raymond James and Stifel are knocking it out of the park with expanded footprints, competitive transition packages and a less bureaucratic, more advisor-centric culture.
It’s the boutique companies, like First Republic Wealth Management and Rockefeller Capital Management, that have been the hottest landing spots for top talent. Their models offer a more elite experience, combining the support and infrastructure of a big company with more freedom and control.
And, of course, independence is more attractive than ever. Scaffolding’s growing ecosystem provides access to capital, turnkey support, and everything an advisor needs to build and run a successful business.
2. “I’m a senior advisor with less than 10 years to retirement and am considering my company’s onsite retirement program, and I think it’s the only smart way to monetize my life’s work.”
For advisors who fully expect to retire from their business, this is an easy path to monetize their life’s work, while next-generation advisors are able to grow their investment base. assets.
But both stakeholders find that the broader landscape offers more than one path to monetization and succession. For example, Senior Consultants who are not quite ready to retire and who do not believe their company is the right legacy for their business often choose to change companies and later enroll in the in-place retirement of the new business, which is basically moving once and monetizing twice.
Alternatively, there are teams that choose to take the leap into independence and design their own succession plan, selling the business to the next generation or on the open market.
Either way, we suggest senior and next-gen advisors make the decision with their eyes wide open. Senior advisors often find out too late that they are tied to their company beyond the term of the deal, while successors lose their option and ability to be free agents.
3. “If I move, my business will come after me.”
The reality is that those who don’t give their business a reason to fight back usually walk away without worrying too much. In the rare cases where legal action is taken, it is because an adviser took shortcuts or did not follow the advice of a lawyer.
There is no doubt that while broker protocol moves provide the most coverage, non-protocol moves are successfully accomplished every day. But it is essential to follow the strict advice of legal counsel. And in the case of a move that does not comply with the protocol, be meticulous in respecting the rules of non-solicitation set out in the employment contract.
4. “If I move to a business that does not have a bank affiliation, how will I meet my clients’ loan needs?”
Certainly, advisors who work in bank-owned businesses have an easy way to meet all loan needs. Yet nonbank-affiliated smart companies have leveled the playing field by offering advisors access to loans through third-party banks. Companies like Rockefeller have actually found benefit in providing more choice, allowing advisors to seek out the best rates and options to meet their clients’ needs.
Similarly, Independent Advisors have found that the ability to “shop down the street” has opened up a whole new world of choice and price competition for their clients, which many Advisors consider to be one of the most attractive features. of the model.
5. “I’m hesitant to move because I’m afraid clients won’t follow me.”
This is still one of the most common concerns for advisors considering a change. In fact, apprehension is valid for those who do not have strong relationships with their customers. Yet the reality is that it’s become far more common for clients to develop lasting relationships with their trusted advisors, not the company they represent.
For advisors who have always put their clients’ interests first, in our experience, 80% to 90% of the clients they wanted to take with them moved to the new firm.
Prior to any move, advisors should assess their relationships and book to determine if portability concerns are legitimate. Review all non-transferable positions and be aware of the impact leaving them would have on the entire company.
Whether you’re considering moving or not, it’s important to always know that there are options and to make decisions based on facts, not myths. these misconceptions can create barriers to greater success.
Mindy Diamond is CEO of Diamond Consultants in Morristown, NJ, a nationally recognized research and advisory firm in the financial services industry.