Developing your own guiding principle will ensure you stay focused on the big picture, not individual items in a vacuum

There are many times in life when we find ourselves in a position where we need to make a life-altering decision. Whether you consider yourself pragmatic or not, it can be hard to remain focused on what really matters most.

Take an advisor I spoke with recently: Steve is a 35-year-old advisor at a boutique wealth management firm in the Midwest. He feels his partner, an advisor 20 years his senior, isn’t adding a lot of value in growing their joint business. Steve is also concerned about the limitations placed upon them by an overly aggressive compliance department. So he’s exploring his options elsewhere.

With a long career as an advisor ahead of him, Steve’s focus is on growth. As such, the threshold question he asks himself after every meeting with a prospective firm is this: “Do I believe I will grow faster and more efficiently as an employee of my current firm or by moving elsewhere?”

That question is what Steve can define as his “true north.” It should be the guiding principle upon which any decision relative to stay vs. go is based.

The power that guides you

Every advisor who is thinking of making a move should identify his true north—the most important thing that, if solved for, would make the decision literally a no-brainer.

Sound simple? I suppose so, but here’s what almost 30 years of recruiting experience has taught me: Nothing is simple.

It is incredibly easy to get caught in the weeds and lose sight of true north because moving to a new firm requires due diligence—which includes making sure that every single aspect of the things you currently do for clients can be replicated. So in vetting another firm’s investment solutions, lending capabilities, planning software, performance reporting options, etc., an advisor has a lot to keep track of. Hence, the possibility that he loses focus on his true north and gets caught in the weeds.

Let’s circle back to Steve to clarify this point: One of his largest clients holds approximately $100 million of a $1 billion portfolio in a proprietary alternative investment. With a ten-year lockup, if Steve were to change firms, it would be next to impossible for him to presume that this tranche of his book would move with him. It’s scary enough to think about making a move and essentially putting your book up for bid, but even more frightening to know that you are at risk of losing one of your most meaningful relationships.

Steve has a choice to make

He can elect to stay put because he believes:

1. That he is likely to lose the whole client, not just the portion that isn’t immediately portable.
2. That this would be a loss that he couldn’t recover from.
3. That this relationship is more important than all others.
4. That he could live with the status quo because things are good enough.

Or, he could remain focused on his true north – “Where can I grow the fastest?” – and say:

1. I will do everything I can to move whatever portion of this significant client’s business in the near term.
2. I will accept the fact that there are always losses, even with the best-planned moves.
3. I have confidence in my ability to grow and build even if I lose a significant client.
4. I believe that the potential upside of making a move outweighs the risks and potential loss—that on par, my entire book of clients will be better served elsewhere.
5. And, that, on par, I will grow fastest elsewhere.

There are plenty of boxes to check off when considering a move, but most of the time they are only pieces of a much bigger picture. There is always a focal point that each of these details revolves around. Identify what your true north really is, and all of the other pieces will fall into place much more easily.