Irish novelist and poet James Joyce once said, “A man’s error’s are his portals of discovery.” While I agree with Joyce in concept, in reality, we all want to make as few mistakes as possible – particularly as they relate to our careers.  Especially during this time of uncertainty, with many firms imploding and others consolidating, it has become even more important for advisors to carefully consider career moves. Fortunately, with enough knowledge and counsel, there are ways to navigate the career path minefield and learn from the mistakes and missteps of those who have gone before us.  Sometimes, though, that’s easier said than done.

Take Fred, a $5 million wirehouse advisor who runs a primarily international business on the West Coast, and is extremely unhappy at his firm.  For the past eight years, Fred and I have spoken about his business and growing frustrations related to the firm’s changing culture, increased bureaucracy, and limits on doing his business. He has done some due diligence in fits and starts during that time, but gets overwhelmed quickly with the process and life’s complexities. He decides to put on his blinders once again where he is, despite many of his colleagues leaving for greener pastures. 

Fast forward to present day and Fred is committed to leaving his firm to go to the independent space since he knows he will soon be unable to do his business at his or any other wirehouse. With an impending sense of urgency, Fred was forced to compress years of intense due diligence into a few months while juggling his family responsibilities as a single dad, with his professional responsibilities at work.  I helped him come up with a clear strategy including a list of questions in order to target his hot button issues including the desire to monetize, to access open architecture and platform, have less bureaucracy, and to surround himself with leaders who understand and are committed to the international space. 

While waiting until the “11th hour” sent Fred into an unnecessary professional tailspin, he ultimately saw that taking control of his career was the most important item on his “to do” list for himself, his family and his clients.  After a thorough due diligence process, Fred chose to go fully independent and create his own firm in order to resolve the vast majority of his “hot button issues.” While he knows that he will not see a monetization event in the short-term, he is comfortable knowing that he will be better off financially by deriving superior take home economics, and being in complete control of his destiny.  Now with his own firm, Fred can make succession planning a top priority by seeking to possibly acquire other RIA practices, or to add other advisors to his firm.

Following are the top five mistakes I see advisors make and how to avoid them:

1.  Waiting until there’s a sense of urgency or panic before considering alternative options.

How to avoid:

o   Don’t give in to inertia – where the prospect of moving becomes overwhelming and turns your feet and mind into cement.  Every three to five years, no matter how content you are – get educated about options.

o   Gain clarity – about how frustrated or unhappy you really are.  Separate that from the notion that there is no better solution out there; the solutions are easy to find, the industry landscape has evolved tremendously.  You can and should control your own destiny.

o   Balance working in the business with working on the business – so you are always focused on growth. 

2.  Lacking a clear strategy when it comes to plotting next moves.

o   Be proactive, not reactive.

o   Delineate the frustrations and challenges you currently have, and quantify just how much they impact you.

o   Define your goals and expectations for the short and long term.  Know what you want to accomplish.

o   If your frustration level is high enough, assess whether your current firm can remediate it, and in an acceptable timeframe for you. If not, consider making a change.

o   If/when seeking a change, consider only those options that will directly remediate the frustrations or challenges you are facing, thus enabling you to accomplish your goals.

3.  Not articulating frustrations to your firm’s management so that they have an opportunity to resolve them.

How to avoid:

o   Be assertive and speak up for yourself.  Firms should be doing more to help you grow and manage your business, not just focus on driving profits and gathering new assets to keep shareholders happy.  Give your managers the opportunity to be responsive.  

o   Recognize that no matter how busy you are nurturing your client relationships, prospecting for new ones, attending to your family’s needs, etc., time spent assessing, analyzing, and strategizing can ultimately yield a greater quality of life, accelerated growth and superior client service.

4.  Ignoring the importance of succession planning.

How to avoid:

o   Ask yourself:  “If I am no longer here tomorrow, would I be comfortable with my clients left in the hands of my current team and/or firm?”  If you don’t seriously address and plan for how your clients will connect with a successor, you will be tied to the business with no way out when you want to retire, or worse, if something should happen suddenly. This is even more of a problem for advisors who run niche businesses since there are likely fewer successors with that specialty who could take the helm. 

o   Assess various opportunities for succession including switching firms to take advantage of a “sunset solution” (a transition plan/package designed for retiring advisors), and exponentially multiply the number of potential suitors for your business. (There’s also an opportunity to monetize twice: once when you switch and again as you retire).  Bottom line is – control the continuity of your business and your own destiny, and protect the equity you’ve built.

o   Don’t underestimate the length of time it takes to find an appropriate successor; it can be a multi-year process which is best undertaken slowly and deliberately.

5.  Not asking enough of the right questions when looking at alternatives.

How to avoid:

o   Be systematic. Prepare a due diligence checklist.

o   Be focused. Ask questions of prospective firms that directly address your current frustrations and personal and professional goals. Assess the economics, cultural fit, client “value add,” and growth potential.

o   Be realistic and flexible.  There will always be give-ups. Determine what your “must haves” are and be ready to negotiate for those.  Don’t choose to move unless “the gains” exceed “the give-ups.”

o   Be forward thinking.  Determine if there is an appropriate succession opportunity.

o   Be an investigator. Ask for financial information on the firm in order to vet its stability. Ask what the firm would do to support your growth and goals.

We can’t always avoid making mistakes, but with the proper guidance, you are more likely to make good decisions about your professional path.