Is inertia holding you back? 5 questions to ask yourself

Wendy Leung - financial advisors - inertia

August 8, 2017
By Wendy Leung

Are you truly in the right place or are you just making the best of a sub-optimal situation?

As recruiters, we talk with hundreds of advisors each month, the majority of whom tell us that they are very happy and have no intention of making a move. Yet, often these same advisors share multiple frustrations that they have made peace with over time: Bureaucracy that breeds inefficiency, problems with client service, platform limitations and reductions in compensation often top the list.

So what’s keeping these advisors in their seats? Is it the simple truth that the pain of staying does not exceed the pain of leaving? Or is it inertia – that natural resistance to change that lives within each of us – that is causing them to settle for less than they or their clients really deserve?

Inertia is often what keeps people from achieving what they are fully capable of. But, it is something that you can overcome. Start by asking yourself these five questions and at least get greater clarity…

1. Just how frustrated are you? Are they minor annoyances or major issues? Have these frustrations impacted your ability to grow the business or service clients?

While we all know that there is no perfect firm, if the daily challenges start to become a drag on productivity, limit growth or, in the worst case, negatively impact clients, then it is time to reassess your situation. Some advisors engage in this exercise regularly, believing that they have a fiduciary obligation to provide a “best in class” offering. Every few years these advisors perform due diligence on a couple of competitive options to ensure they are at the right firm regardless of whether they are committed to making a move or just curious; while others only reassess when the pain becomes great enough.

2. Are you unsure if clients will follow?

The reality is that fears regarding client portability are often unfounded. Advisors with long-term client relationships, and who move for the right reasons, typically bring 90-100% of their recruited assets in the first year. The Broker Protocol has been a game changer in this regard, allowing advisors to move more freely without fear of legal action from the firm they depart. Plus, hiring firms have created dedicated transition teams to help advisors prepare for the move and manage the onboarding process, which includes helping to create messaging that clearly articulates to clients “what’s in it for them”.

3. Do you believe there is nothing better out there?

Many advisors believe that trading one wirehouse for another may not move the needle enough to make the disruption of a move worthwhile. These advisors stay put, not realizing that the landscape has vastly expanded over the last 5 years and that today there are a wide variety of options that can deliver a platform and resources that are superior to what wirehouses provide. Advisors who are not interested in independence, but are looking for a more nimble, flexible, advisor-centric culture have found homes at regional firms. Entrepreneurial advisors, who are looking for the ultimate in control, true customization and open architecture, typically launch independent firms. In order to streamline the process, many leverage best in class platforms, resources and integrated technology solutions that are offered by top service providers in the RIA space. For those that want a more turnkey platform, independent broker dealers provide that with ongoing service and support.

4. Do you stay because retirement is on the horizon?

Recognizing that the advisor force is aging, most firms have responded by enhancing their retiring advisor sunset programs. This is great for advisors who believe that their current firm is the right home for their clients and team. That said, if the retiring advisor does not feel his firm is the right legacy, the opportunity to move to another firm or go independent is something that many are considering as a viable alternative.

5. Are you happy at the current firm?

Happiness is an underrated but important part of the equation. For many advisors, the firm that they work for today is unrecognizable from the firm that they joined. Industry consolidation, buyouts and bank ownership have changed the culture, making the firms feel big, bureaucratic and impersonal. Many advisors feel that this is just the price of doing business in today’s environment. Others have found that you can make a move that ups the happiness quotient and is a better place for both the business and clients.

Thinking through the answers to these questions should help you to clarify whether you are truly in a good place or are just making the best of a sub-par situation. With markets high, clients happy, and a landscape replete with options, many advisors view this as an optimal time to make a move. So, if you’re staying the course because, overall, it is working, then that’s great. But, if you’re staying because inertia is holding you back, our best advice is to get educated on the options available for your business and goals. Once you’re equipped with that knowledge, whether you choose to stay or go, you are doing so from a position of clarity and strength.