The Transitioning Advisor’s Lament: “Things I wish I knew before…”

2. It starts a year in advance.

One of the most common questions we get from advisors is, “What can I do to prepare for a move?” And while this is absolutely the right question, many advisors ask it at the wrong time. An advisor who is actively considering a transition in the next 3 months, for example, has limited ability to maneuver when it comes to investment decisions, prospecting, and team setup. But advisors who plan years in advance of a move have a major advantage. Here are some common strategies advisors can use:

• Whenever possible, utilize portable investments like vanilla ETFs rather than complex alternatives or SMAs. The reality is that certain products can cause portability and/or replicability problems when an advisor is ready to transition. From past experience, Alts, SMAs, and firm model portfolios are among the most “sticky” products.
• Get educated on the landscape at least every 12 months. Why? First, it provides some peace of mind by visualizing what a “Plan B” might look like. More importantly, it allows advisors to see exactly how the industry is changing over time. A savvy advisor can learn a lot about where the industry is heading by looking at where it came from.
• Engage competent legal counsel. Especially in a world where many advisors have opaque post-employment restrictions, outstanding recruiting deals, and/or outstanding retire-in-place deals, it’s critical that advisors understand exactly what their “free agency status” is. Many advisors come to us seeking to understand their options only after reaching a point of frustration or limitation. We’ve seen instances in which attorneys “pump the brakes” on a move because an advisor didn’t properly understand the legal ramifications.
• Spend time focusing on vulnerable and/or critical relationships. It may sound obvious, but solidifying these relationships early and often is the easiest way an advisor can ensure a successful transition. Ultimately, the single factor that determines whether it was a success is whether your clients followed you. It’s important that you give them a reason to do so.

3. It has benefits you didn’t realize at the time.

This is what most advisors find energizing about a move: They set out to solve one problem and often do, but they also achieve something far greater. For example, an advisor might move because:

• Compliance restricted their marketing—and when the limitations were removed, the ability to creatively communicate and market to clients and prospects opened up a massive new growth engine.
• Tech seemed “good enough,” but lagged behind the competition—and moving from a small sandbox to a much larger one provided greater customization and efficiencies they hadn’t even imagined.
• Monetizing the business—and simultaneously solving for the frustrations and limitations that had been plaguing them, while providing a financial cushion.
• And this one is often a breakaway advisor’s favorite “feel good” bonus: many report hearing from clients, “We get it,” or some version thereof—recognizing that their transition to independence created many positive benefits on both sides of the table.

The past is not always indicative of the future, as they say, but we believe advisors can learn a great deal from their peers. No two books of business are the same, but we’ve been fortunate to guide some of the industry’s largest and most sophisticated advisors. In the post-mortem debriefs months after a move, we often find nuggets of gold like these—and there’s no better way to learn than from those who’ve been there and lived to tell about it.

As seen on WealthManagement.com…