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Podcast

For Financial Advisors

Industry Update on Recruiting: Should you go for the forgivable loan?

Posted by Mindy Diamond

A conversation with Louis Diamond

It’s a question that advisors often ask themselves when considering a move:

“Should I go for the short-term windfall or bet on the long-term potential?”

The merit of forgivable loans tied to recruiting is an ongoing debate in the wealth management industry. The decades-long convention for advisors considering change (especially those in the W-2 world) is to monetize the business by negotiating a lucrative transition bonus with competing organizations.

Yet those on the independent side often talk about building long-term enterprise value and controlling one’s own destiny instead of focusing on deals.

Louis Diamond explored the topic in an article for AdvisorHub, Advisor Recruitment: The Bull and Bear Case for a Forgivable Loan and given its popularity, we decided to take a deeper dive in this podcast episode.

Is it wrong for an advisor to seek monetary remuneration for taking the risk and going through the hard work of a transition? Absolutely not!

Is it better for advisors to self-finance their move and focus on the longer-term economics of independence? Possibly.

Mindy and Louis consider both sides of the argument, including:

  • The current state of deals—and how they differ depending upon firm and channel.
  • The impact of advisor mindset—and how it has influenced change in the industry.
  • The real value of a recruitment deal—and how to reconcile leaving potentially life-changing money on the table when going independent.
  • The short-term windfall vs the long-term potential—and how to think through what’s best for your business life.

This episode may not settle the debate over whether you should opt for a forgivable loan or not—but it will give you some food for thought when considering what’s right for you.

Podcast: Play in new window | Download (Duration: 31:01 — 42.6MB) | Embed

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Download a transcript of this episode…


Related Resources

The Self-Assessment for Advisors
A subset of the more extensive assessment that we provide to our advisor clients is now available for download. Download->

The Juggling Act: Balancing Short-Term Needs and Long-Term Goals
A process to help you identify and prioritize your immediate needs vs goals for the future when considering a move. Read->

Looking for the Biggest and Best Deal: Don’t be a Jerk!
5 things you can do to ensure you’re not giving off the wrong vibes and getting an inferior deal because of it. Read->

Show Me the Money
How Independent Advisors Monetize in the Short-Term. Listen->

The Bigger Picture for Independent Advisors
How to Monetize Your Life’s Work in the Long-Term. Listen->

Beginning with the end in mind
How to chart an efficient course to your best business life. Read->

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About Mindy Diamond

CEO – By counseling advisors on how to ask the right questions and “dig deep”, she helps them look at all of the opportunities available to find the one that allows them to reach their full potential. That is, to best serve their clients and live a life that is in sync with their own beliefs and values. Learn more...

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    WHAT OUR LISTENERS ARE SAYING…

    • Your podcast helped me a ton during my due diligence. There is no replacement for hearing from others who were successful leaving the wires. You are doing great things for the industry.

      Rory O’Hara
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