The evolution of the landscape has provided advisors with more choice than ever to build the business they envision, yet many are still looking for a utopian model that likely doesn’t exist. So do you hold out and wait for perfection—learning to live with whatever shortcomings that exist in your current circumstance? Or, are you willing to be flexible in your expectations and choose a better, albeit imperfect, solution?
These considerations came up in a call I had with “Elayne,” an advisor working for a wirehouse firm in the Midwest for the past 25 years. A top-of-the-food-chain advisor who once received plenty of attention and lots of exceptions, she became increasingly frustrated by a more bureaucratic culture complete with heavy-handed compliance oversight, and the feeling that each day she was less and less in charge of determining what was in the best interests of her clients.
So, with annual production of around $3 million and assets under management in excess of $400 million, Elayne had her pick of opportunities. Even her own firm offered an attractive retirement option where she would essentially sell her business to her next gen partners and be paid almost 2X her book. (That’s a lot of scratch for a path-of-least-resistance option.) And every other brokerage firm in town, large and small, was offering her very attractive deals as recruitment incentive.
Elayne was now left to make a transformative decision—one that would define the next phase of her business life. While each offer had its own merits, she felt that not one of them solved for “everything” she was looking for. Inertia started to take hold as Elayne wondered if maybe she should just wait things out…that maybe, that “perfect” scenario would eventually appear.
So how does an advisor like Elayne decide to take that step forward, and when she does, how does she decide which path to take?
How do I find my utopia?
Ultimately, the decision on where to move – or to stay put – is entirely a personal one. However it should be based upon criteria that will allow you to separate the emotion from the motivation. Your decision-making process should start by answering these 3 questions:
- Just how much “pain” are you in? That is, to what extent are the limitations or frustrations (the source of the pain) that you’re feeling tangibly impacting your ability to serve your clients and grow your business?
- Just how motivated are you to build something new—whether it’s the desire to go independent or to move to another brokerage firm? How driven are you to become an entrepreneur or work somewhere else?
- Just how much do you really want what a new opportunity will offer you? This often equates to how important the economics of a deal are and how much value you place on other aspects of a prospective value proposition.
Elayne ultimately landed at a boutique quasi-independent firm with a great story to tell—a very real referral mechanism via partnership opportunities with the firm’s investment banking unit, a robust infrastructure to leverage, a beautiful office, a much more entrepreneurial culture.
What’s not “perfect” about that? Well, the transition package was less than half of what some of the larger firms offered to her.
While she initially balked at this “subpar deal” and worked hard to negotiate for better terms, in the end, she checked off all of the boxes that were most important to her. Elayne believed verily that she would grow faster, be able to service clients better and have a better quality of life at this boutique shop and those things were ultimately worth more to her than any amount of transition money.
Typically, we find that no one looks to make a change until the “pain of staying” is great enough. Yet often it’s not pain alone that’s pushing an advisor to move. In today’s environment, with the very real pull of independence in its varying forms, many advisors choose to break away from employee status to plant the flag of entrepreneurism—despite the fact that where they are still serves them pretty well.
Searching for “Utopia” can be a frustrating journey—particularly if you are not completely clear about what your version of Utopia is. Take stock of what is most important to you and map your next step from there. Only then will you find what you’re looking for.
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