The high-profile terminations of top advisors in the recent past have put fear into even the most long tenured, productive and “cleanest” FAs. While I completely sympathize with this reaction – and even understand it – I do think it is a bit overblown and unwarranted. If you are an advisor who has reason to worry – because you regularly cross the line on compliance rules or have a client just waiting to file a complaint related to unauthorized trading – then you probably should be sweating and concerned that the hyper-vigilant compliance and legal folks will catch up to you. But, if you run a clean business, always put your clients’ best interests first, and continue to do the next right thing, then it is my opinion that to make decisions rooted in fear does not serve you – or your clients – well.
The decisions I am referring to are of the “stay vs. go” variety. Many high-quality, top producing advisors from Merrill Lynch, for example, have jumped into exploration mode as a result of the much publicized March termination of billion-dollar advisor Tom Buck in Indianapolis, and the September, 2014 termination of $2.5B team Stephen Brown and James Goetz in Rochester, NY. The “If they can be terminated, maybe I’m next” mentality is propelling advisors into fear mode, regardless of whether they even have anything to fear.
Granted, advisors working for bank owned firms like Merrill Lynch are feeling especially vulnerable since history shows that their firm’s tolerance for risk is less than others. That said, there is no question that today there is much more of a zero tolerance approach to managing risk at all of the major firms. As Investment News reported that Robert Plaze, former deputy director of the SEC’s Division of Investment Management, said earlier this month, “Gone are the old days where someone who was a big producer or a significant force could act with impunity.” And, advisors who do a fair amount of transactional business are looking over their shoulders because they know that they are more closely supervised.
While employee status at a major brokerage firm means that an advisor has little control over his/her professional destiny, I truly believe that advisors are still highly valued, the wealth management business is often the crown jewel of their firms, and no one is looking to get rid of good advisors for no reason. The vast majority of quality advisors do not get terminated – nor will they be – even though you may be reading about some high-profile terminations in the daily news. I am not a fan of making rash decisions for the wrong reasons and I definitely don’t think that an advisor should look to jump ship unless it is to serve clients better, grow one’s business faster, and create a better quality of professional life. Given that, why waste time worrying fruitlessly when you can use your energy to instead get educated and identify a Plan B.
Napoleon Hill once said, “Fears are nothing more than a state of mind.” That being said, use this time not to look over your shoulder, but to look ahead at your future and at how you can best serve your clients with your “Plan B” in hand. If that view says it’s time to evaluate your options, then it is time to do so.
