No doubt that changing market conditions, looming regulatory and tax law modifications, asset allocation and client requirements weigh heavily on the minds of all advisors—but for those considering change, there’s even more that they’re losing sleep over.
There’s plenty on the minds of advisors these days: market conditions, pending regulatory and tax law modifications, asset allocation, business growth and, of course, managing client expectations. Unfortunately, these are all things that come with the territory.
Yet there are those who are also looking at the bigger picture and their role as a fiduciary to clients. As the world changes around them, they’re wondering: “Am I in the best place to serve my clients and grow my business?”
It’s a threshold question that advisors should be asking themselves—and even more so as the industry landscape has expanded, and the pandemic changed how everyone conducts business.
“Is my firm the best partner for me?”
“Am I able to serve my clients without limitation?”
“Am I building the enterprise I have my sights set on?”
And these are all valid concerns, because the reality is that they are the very things advisors have the most control over. As big firms become more bureaucratic and compliance-driven, advisors are finding they are losing agency over how they grow their businesses and manage their clients.
But advisors still have control over their decisions—those that will have the greatest impact on the growth of their business and the legacy they leave at the end of the day.
Yet as advisors embark upon exploration of their options, many get “stuck”—worried more about what “might” happen if they leave their current firm. As a result, some stay put and accept the status quo because the fear of rocking the boat can feel greater than the potential that might await them.
So what is it that worries these advisors most? Here are 7 common concerns we hear:
- “Will my clients remain loyal to me?”
While this is every advisor’s primary concern, I think it’s far less of a concern for those who have solid relationships built upon trust. If you make it a point to focus on always taking the next right action on your clients’ behalf, and act with integrity, chances are good that your clients will see you as the fiduciary you are—and you will have given them little reason not to follow.
- “Will my staff remain loyal to me?”
Support staff are faithful when they are treated with respect and compensated fairly. This means rewarding them well for their efforts, and treating them like partners—that is, letting them know that they are an integral part of your business. It also means taking their frustrations and concerns about your firm seriously. Staff members are often the first to notice issues impacting clients, so be sure they are heard and validated.
- “Will my firm force me to take actions not necessarily in my clients’ best interests?”
This is a big one! Unintentionally or not, brokerage firms ask their advisors to focus on the things that add the most to the firm’s bottom line—and those things are not always what your clients need. Asking advisors to cross-sell banking products, to bring in a certain number of high net worth households, or to adapt to new technology that the firm spent millions on (but you don’t believe adds value to your business or clients), are examples of an incongruence that often exists between advisors and their firms.
- “Will my comp plan change and incent me less to be the best steward for my clients?”
We hear this a lot from top teams: “I want to be driven by what’s best for my clients, but the only way for me to protect my take-home economics is to do what the firm is asking of me. And they are not necessarily the same things.” The more advisors feel their values and morals are at odds with what they need to do to please their firms, the more they will seek greener pastures elsewhere—options that grant advisors greater agency over their professional lives.
- “Is there a firm, model or opportunity out there that is better than where I am now?”
To be sure, an expanded industry landscape means that an advisor is more likely than ever to find their version of utopia. But any change requires energy and time to do comprehensive due diligence—and any move comes with potential risks and disruption to momentum. So the best advice is to make sure that the pain of the status quo is truly great enough and that you have found a firm or model that is more than “better enough”—that is, despite the risk and disruption, the upside is well worth it.
- “What if that firm, model or opportunity looks good on the outside, but when I get there, it’s no better than where I came from?”
Conducting thorough and deep due diligence is the antidote here. Successful transitions are more likely when you take the time to look well under the hood of any new firm: meet every person who will play a role in your transition and support, ask questions about anything and everything, and walk through every aspect of your business to understand exactly how each client account would map over. Plus, keep in mind that the clearer you are on your goals before making a move, the more likely you are to achieve them.
- “How will I monetize my business at the end of the day?”
You have every right to expect to monetize your life’s work—and there are several different ways to do so. You could stay put and retire through your firm’s sunset program, or you could move to another traditional firm and retire when ready through their equivalent program. If your desire is for greater freedom and control, you could go independent and create your own customized succession plan—and ultimately sell your business to your employees, to an outside investor, or a larger independent firm.
Fear is often born out of a lack of information or an abundance of misinformation. Taking an honest assessment of your business, goals and frustration at your firm will give you the clarity you’ll need to eliminate some of these concerns. Then getting educated on the options available in a much-expanded landscape will help you assess the future from a position of strength—rather than allowing yourself to get stuck in a cycle of inertia and indecision.