With The Clash ringing in their heads, advisors often get stuck when trying to answer the proverbial question: “Should I stay or should I go?”
In their 1982 hit, “Should I Stay or Should I Go,” English punk rock band The Clash asks a compelling question of financial advisors. (OK, so maybe they weren’t specifically speaking to wealth managers…) Regardless, it is a question on the minds of most, if not all, advisors in this world of heightened optionality and competition for top talent.
Though not quite as catchy as the iconic song, the next lyric in what might be an anthem for financial advisors would posit a slightly different question: “Do I stay because I am well served, or do I stay because I feel stuck?”
So what does “well served” look like? It depends on what you, as an advisor, value most. For some, it’s a meaningful referral and lead generation source from the firm. For others, it’s about being left alone to freely serve clients as you see put. And for others still, it’s about overall value provided relative to the “firm keep.” The latter is one of the most powerful definitions as it succinctly captures the ethos of the issue: If the firm is keeping more than half of your paycheck, they had better be providing value commensurate with that override.
Yet we often speak with advisors who feel tied to their firm for reasons other than feeling well served. To be sure, it requires a certain level of introspection to determine if you stay because your firm adds genuine value, out of loyalty, or some other factor—or even some combination thereof.
Yet it’s these “other factors” that many advisors get caught up in because they’re often less “concrete” than qualifying the value a firm provides, leaving advisors with plenty of room to get stuck in “indecision mode.”
“This indecision’s bugging me.”
So what is leaving advisors mired with indecision and uncertainty about whether they are truly in the right place to serve clients and grow their business? These are the 6 most common factors we hear—and another way to consider each.
“I have too many clients.”
Large books of business can present challenges and may even make a transition more cumbersome or time-consuming—but they’re certainly not impossible. Firms have gotten infinitely better at supporting transitions, regardless of book size. Moreover, a transition may present a good opportunity to cut ties with less profitable clients and relationships.
“I have money left on note/obligation.”
This is a question of pain vs. gain, a topic we recently wrote about. Some firms are even willing to reimburse for outstanding note obligations in recruiting deals. But typically, the more money left on a note, the more pain an advisor would need to be in to consider leaving early and paying back the balance.
“I’m too old to move.”
You’re never too old—we’ve helped advisors in their 90s change firms and models. And many firms offer creative structures for senior advisors to retire/sunset out and thus “move once and monetize twice.” Instead of considering age as a barometer, I would consider whether your current firm has the right legacy for your clients and your business.
“I just signed a retire-in-place agreement.”
This is an instance whereby you may very well be stuck. But it’s worth having an attorney closely review the agreement to advise whether there are repercussions (monetary or otherwise) for terminating the agreement and if there are additional non-compete or non-solicit provisions.
“I’m part of a big team.”
The big firms love having advisors on teams because aside from there being strength in numbers when it comes to client care, it’s also more difficult for advisors to leave. But what happens if you are less satisfied with the status quo than your partners? It boils down to weighing how unhappy you are vs. the value of the partnership. If the value you get from the latter is greater than your overall unhappiness, then it makes sense to stay the course with the team. But if you get to a point where you look to the future and worry that your vision is very different from that of your team, or if you have less to gain from the partnership than they do, it may be time to consider your options.
“The grass isn’t greener, it’s the same everywhere.”
It’s easy to be cynical and presume it’s all the same everywhere. And the truth is, there was a time when options were much more limited. But today, advisors have benefited from an expanded industry landscape where the waterfall of possibilities is more robust than ever before. No doubt, advisors may choose not to move because they aren’t motivated to do so—but it’s not due to a lack of optionality.
These are just a few possible reasons why an advisor might rationalize staying put. And I do not mean to minimize or dismiss these very valid concerns, because one advisor’s minor issue is another advisor’s Mount Everest. These are deeply personal considerations, and the reality is that in almost all cases, staying put is the easiest and cleanest path to take.
The reality is this: Those who choose to stay with their current firm should do so first and foremost because they and their clients are well served, not because of other, non-value driven factors.
As seen on WealthManagement.com…