Advisors who see themselves as career wirehouse folks may assume that little to no due diligence is required when considering a move to another wirehouse. They often move forward, neglecting to ask a few important questions whose answers can define their future with the new firm.
Any move, including one where there are preconceived expectations and a lucrative transition package, should move the needle in a positive way for your business. The following four questions will help you determine if the move to another firm will actually be “better enough” for you and your clients.
1. What is the benefit to my clients in making this move?
The key to a successful move is that it must improve a client’s situation in a meaningful way. Most quality advisors have a fiduciary mindset and as such they want to make sure that they “do no harm” to their clients by making any changes, including a change in firm. Once comfortable with how the current business maps over, you MUST understand how you will demonstrate to your clients “what’s in it for them.” That could mean superior technology that gives them easier and more comprehensive access online. Or it may be that the new firm has a strong financial forecast and has avoided negative headlines. It’s undeniable that you may be less inclined to move without the robust financial incentives, but this must be coupled with a compelling story to clients about why you are making this change.
2. How will the firm support my goals for growth?
Almost without exception, all advisors are committed to growth—whether doing more business with existing clients or attracting new clients. A firm distinguishes itself from the pack when it can demonstrate in concrete terms how it will help an advisor grow. Do they provide more robust or easier access to sophisticated products and expertise, such as in alternatives, credit and lending solutions, philanthropy or syndicate? You’ll find that firms may host client appreciation events at their expense, and support creative business development and marketing initiatives, including embracing social media. Even the most successful advisors can benefit from the expertise and insights of coaches about best practices and will value a firm’s efforts to make these resources available at the firm’s expense.
3. How will this move better support my team or help me create – or strengthen – a succession plan?
If you need to add second and even third generation talent to your team, you will want to understand if a firm has been successful in recruiting and developing early tenure advisors. It’s important to know how your existing staff will be compensated, and if they can (where appropriate) participate in a training program to become licensed. Given the average age of advisors, it’s increasingly relevant to evaluate a firm’s retirement or sunset plan. How does being under a recruitment deal impact participation in a future retirement package, and what flexibility is there to customize the terms?
4. What is the reputation and perception of the firm, both nationally and locally, and is it the right cultural fit?
While management changes routinely at the local levels, advisors must still have a level of comfort with local and complex management if they are to consider joining the firm. It’s equally important to speak with senior leadership about their vision for the firm’s future. In this post-financial crisis world, advisors need to understand a firm’s commitment to wealth management, as well as the stability of the ownership structure.
Wirehouses may be more similar to each other than they are different, but even subtle differences can matter to advisors when considering a move. While advisors may be tempted – because of the overall similarities – to forgo extensive due diligence, it’s imperative that you vet every aspect of your business in order to thoroughly understand how it will be supported in what is still a “new” environment.
It’s incumbent on any firm you speak with to describe their unique value proposition as it relates to your business and help you to craft a message to clients and team members alike as to why – apart from the attractive incentive package – you made this move. It’s your responsibility to be at the ready with the right questions to ensure you get all the answers you need to take the next step