A Guide to Successful Networking

If you’re thinking of changing firms, one of the most important things you can do early on in the process is to network with other advisors. Indeed, according to The Advisor Evolution Study, conducted by Registered Rep. and TD AMERITRADE Institutional in the fourth quarter of 2009, 52 percent of respondents said they network with other advisors before making a move.

Successful networking, however, means more than simply telling everyone you know you’re looking for a new job. Among other things, it means having a tight focus, asking the right questions, and doing your homework.

One of the best ways to network effectively is to talk to people in the channel you want your next job to be in. “The best people to network with are people you trust a lot—people whose judgment you respect—people who can be objective,” said Philip Palaveev, president of Fusion Advisor Network in Elmford, N.Y.

One place to start might be former branch managers who have moved on to firms you are considering. They will likely be honest with you about the pros and cons of the prospective firm, Palaveev said.

When you are talking to people, try and be as specific as possible about what you want. Kyle Quinn, a former wholesaler for MetLife Investors, knew he was looking for an advisory position within a large regional or national CPA firm in the Los Angeles area. So he started talking to former bosses, other wholesalers, advisors he had worked with, and others telling them about the kind of job he was looking for. He then compiled a list of possible contacts and made calls a few times a week while he was driving to and from work.

Ultimately, the networking paid off. A social acquaintance who had heard what Quinn was looking for approached him and gave him a contact at CBIZ, where Quinn now works as a wealth management consultant. “The tighter the focus, the more people you can have looking for you, without them knowing that they are looking for you,” Quinn said.

If you’re interested in exploring the RIA route, a reputable custodian can be an invaluable resource in the job hunting process. Custodians, for example, offer advisors anonymous access to information as well as access to advisors who have successfully transitioned to the RIA model. They can also help connect advisors to recruiters and can help advisors think through the move and what it will entail.

When you are in the market for a new job, it could also behoove you to spend some time using social networking sites liked LinkedIn, Twitter and Facebook. While many advisors network the old-fashioned way—it is after all a relationship business—social networking is another up-and-coming way advisors are finding jobs.

The best social networking site for professional purposes is LinkedIn, according to Brad Schepp, co- author of “How to Find a Job on LinkedIn, Facebook, Twitter, MySpace, and Other Social Networks.”

Through LinkedIn, you have access to more than 55 million professionals, including executives from all Fortune 500 companies. A new member joins LinkedIn approximately every second, making it a great way to easily connect with former co-workers and people in the financial services industry.

LinkedIn also allows job seekers to search for opportunities and connect with others who share comment interests.

“The best thing to do is to network with people face to face. But let’s say your resume is in order and you’ve got some face-to-face events scheduled, what are you going to do to look for a job? My advice is to get on LinkedIn and start using its ample resources,” Schepp said in an interview. “For professionals, there’s probably no better way you could spend your time in front of your computer than using LinkedIn if you are looking for a new job or new opportunities,” he said.

Industry conferences are another good way to network because they bring together a cross-section of advisors in a relaxed setting and potentially allow for more unbiased discussions. “You get to talk to other advisors without actually telling them that you’re looking to change firms,” said Palaveev of Fusion Advisor Network.

According to the Registered Rep. and TD AMERITRADE Institutional Advisor Evolution Study, once advisors became serious about a move, the questions they had about the transition process varied greatly depending largely on which channel they were exploring. For example, RIA respondents were most interested in learning more about potential transition or start-up costs and how they could achieve independence, whereas other types of advisors deemed the stability of a new firm or business model most important. Nonetheless, the majority of advisors continued to find the answers they sought through networking.

In order to do this effectively, however, you’ll need to know the right questions to ask, recognizing that the questions will be different depending on which channel you are exploring.

For example, advisors looking to transition to the independent RIA channel should first talk with advisors who have started their own RIA and those who have joined as the process will vary. Advisors interested in established their own firm should also ask questions pertaining to start-up costs, custodians, technology, infrastructure, compliance and other business-related issues. Advisors interested in joining an RIA should find ask about the firm’s culture and investment philosophy.

Meanwhile, advisors looking to join another broker/dealer should ask questions like: When did you join the firm? What made you join the firm? If you had to make the same choice today, would you still do it?

“You want to make sure that the people you’re talking to are not just staying with the firm because of the cost of changing,” Palaveev said.

Advisors seeking to move to another broker/dealer should also ask questions like: What sets your firm apart from other firms in the market? What is the culture in the home office? What’s an example of the last problem you had with the brokerage? How was it resolved? Do you feel like you have a good relationship with the home office? Do you have a relationship at all?

You’ll also want to find out things like how the broker/dealer is organized and how the particular branch operates, Palaveev said.

It’s also very important to talk to people with a similar business profile at the prospective firm. “You’re really signing up for the platform and the strategic direction of the firm. That’s what you want to be focused on,” said Mark Elzweig, a New York-based recruiter.

For example, someone who does a lot of structured products and derivatives work should set up meetings with product specialists in that particular area and have in-depth conversations to make sure his or her clients can be serviced by the firm. “It’s not like the old days when people did stocks and a couple of bonds and you can do it anywhere,” he said.

Questions or feedback? Please email us at nextmove@penton.com.