There’s real value to building teams in wealth management firms.
For clients and the business overall, there’s strength in numbers—where the merging of talent offers the potential of greater operational efficiencies and growth.
Plus, teams provide a built-in succession plan—keeping the business in-house should any of the advisors on the team desire to retire.
Yet many of these teams were formed not by the intentional “coming together” of like-minded players, but instead more at the encouragement of the firm to join forces. A retention strategy of sorts—because being part of a team makes it more difficult to leave the firm.
But it doesn’t always work out that way.
While these team members may have developed efficient and amicable practices together, oftentimes the individuals never fully realize the synergies typical of a successful ensemble.
That is, as my guest on this episode put it, they operate “more like a bowling team than a basketball team.”
Dan Johnson saw real value in being a part of a multi-generational team at Merrill. As the youngest member of the group, he credits each of his partners for the knowledge he gained over his 8-year tenure. And he felt a real camaraderie existed, but there was still something missing.
Yet there was one thing they were all aligned on: their frustrations over changes at Merrill. So as a group, they decided to explore their options.
And it was through due diligence that it became apparent they each had different visions, goals and timelines, which ultimately led them each to consider different options.
That is, while Dan was leaning towards independence, his partners were looking at other employee models.
It’s a common story we’re hearing from advisors in recent years. Team members coming to a fork in the road where they need to honestly answer the threshold question: “Are we better together or apart?”
And in this case, the team decided to go their separate ways—with Dan choosing independence, three of his partners opting to go to Morgan Stanley and one signing on to Merrill’s sunset program, CTP.
So in August 2019, Dan launched RIA Birchcreek Wealth Management based in Dayton, Ohio.
In this episode, Dan speaks candidly about his journey, including:
- The process of exploration and decision-making amongst team members—and why he ultimately chose independence.
- The pros and cons of each option he considered—and what it meant to give up the recruitment deal at another firm.
- The prospects of staying at Merrill with a partner who was signing on to CTP—and why Dan opted not to become the inheritor of his book.
- The choice to leave some assets behind—and how this strategic intent to “shrink to grow” has impacted his business today.
While it meant each member of his team choosing a different path, Dan shared those paths were the right ones for each of them and their clients.
Yet it was his realization about independence that really resonates: “The growth potential will eclipse the moment-in-time windfall of taking a recruitment deal.”
It’s an episode with insightful takeaways—whether you are part of a team, or an individual considering independence.
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Mindy Diamond is CEO of Diamond Consultants in Morristown, N.J., a nationally recognized boutique search and consulting firm in the financial services industry.
