Lining Up Your Pros And Cons

So you're unhappy at your current firm. But how unhappy? Quantifying the pain can be difficult, but it’s essential if you're actually considering doing something about it. That’s because leaving can be painful, too. Here’s a starting point. The following is a list of some of the pain points advisors who want to leave their firm often describe to me. Do any of these sound familiar?

• Limitations on choice: product, technology, type of business.
• Pressure from clients to change firms.
• Tarnished firm brand name.
• Fear that wealth management division will be spun off.

Of course, an advisor’s interest in moving may be less about frustration with the current firm, and more about the appeal of an outside opportunity—specifically one that allows him to grow his business faster and serve his clients better. The following are some of the most common reasons advisors tell me they are attracted to a new firm:

• Positive synergies between the advisor, the new firm and its management.
• Better platform, product, technology, service model, etc.
• Greater name recognition and positive press.
• Financial considerations (i.e: transition monies, higher payouts, etc.)
• Ability to partner with an individual advisor or established team.
• Ability to monetize the business.

If your motivation for a move is primarily unhappiness with your current situation, then you should be aware of the dizzying array of business models and options open to financial advisors today. Sometimes, advisors begin to feel they have “looked at everything” but found nothing that makes sense for them personally. The question then becomes, what are you looking for—and why are you looking at all? Prospective firms can make some appealing promises and paint a pretty picture, but we all know that there is no perfect opportunity.

Take Marla and Vivian, a New York City wirehouse team that generates around $1.4 million in annual revenue on $150 million under management. While they had worked for their firm for 10 years, they had been complaining for some time about how unhappy they were. After taking meetings with several potential firms including other wirehouses, boutiques and regional firms, they determined that all of these failed to meet their expectations for one reason or another. But after much indecision over whether they should stay or go, they finally realized that they would never find the “perfect” firm, and would have to be more open-minded about their options. At the end of the day, they went to another wirehouse firm.

Of course, even if you have your eyes wide open, it may not work out. Take Jerald, another wirehouse advisor who kept getting flak from his clients about impending investigations of his firm. Eventually, the bad press about his firm even prevented him from landing a few large accounts. But when he explored a few other firms, he did not see anything that he found immediately compelling. He balked at the prospect of working for a company with many more thousands of advisors and had a hard time convincing himself and some of his larger clients that another wirehouse would be the right place to move his business. And he wasn’t ready to be an entrepreneur at an independent firm.

For now, Jerald has decided he is “okay” with his current firm, but he remains intrigued with the idea of independence. He believes he is at the stage of his career where he does not need a large firm behind him. Further, given the longstanding, personal relationships he has with most of his clients, he expects they will follow him wherever he decides to move. And so, he is leaving the door open to revisit indpendence in the future, if he finds that things at his current firm worsen.

If you are unhappy at your current firm, believe you have explored your all of your options and have still not seen anything compelling, perhaps you have to adjust your expectations. Flexibility and open-mindedness are critical to finding the right opportunity.