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5 “Future” Considerations for the 30-Something Advisor


5 “Future” Considerations for the 30-Something Advisor

You are a 35-40 year old advisor who is 10-15 years out of your firm’s training program and you’ve built a quality and thriving business.

You have strong, personal client relationships and have amassed $100-$125MM in AUM. You are the best of the industry’s next generation. There’s no question that you can stay the course as what you have done so far has delivered an enviable level of success and has well positioned you for the future. But you are forward-thinking and want to plan for this next chapter in your professional life. You are most definitely being wooed by every firm in the area, as well as likely being approached by multiple advisors, both at your own firm and elsewhere, to join forces.

With the very high-class but very real challenge of having so many options before you, what should you be considering? Here are 5 to start with:

1. Do It on Your Own

If you believe that what got you to this point will continue to work for you and allow you to reach your next goals and beyond, why mess with success? Nonetheless, it makes sense to look to build your own vertical team, with you at the head. You may at most be only 40, but you will need time to find and mentor the right successor. And as your clients grow in size and you add new relationships, it will be more and more challenging to continue to provide the same high-level of service. This vertical team model allows you to retain control and autonomy but may leave you feeling at a loss when it comes to being mentored yourself. It also creates the additional responsibilities associated with managing a team and has the potential to take you away from client service and business development—the very things that you may value most and have been responsible for your success thus far.

2. Emergency back-up

If you are not interested in forming a partnership, or you haven’t yet found the right partner, there may still be a need for back-up. You may always prefer to remain on your own, but some things are out of your control and you need a plan just in case you are hit by the proverbial bus. Perhaps you just want peace of mind when you are out of the office. Entering an arrangement whereby you and a trusted colleague provide limited scope coverage for each other without otherwise creating a partnership may be a viable solution. While there is no commitment that this will develop into a more traditional partnership, it can serve as a trial period allowing you to further evaluate whether there is greater potential.

3. A partnership of equals

If you are beginning to feel challenged in your efforts to be all things to your clients and welcome the idea of partnering to add expertise, the exchange of ideas and share client coverage, you may consider forming a partnership with a peer. If you are fortunate enough to be with a firm where you have a community of like-minded advisors who are at a comparable stage in their careers, you may have a choice in building a horizontal team. You certainly need to address the compatibility of clients, business style, values and goals. Since you have operated up until now as a lone wolf, it will be an adjustment to run the business in tandem. You must define how decisions will be made and how clients and fees will be split, both with new relationships and those that each member brings to the table. And most importantly, you must be willing to compromise. Keep in mind that what you gain in bench strength for clients must outweigh what you give up in autonomy. Since partners also take on each other’s weaknesses and challenges, the value must clearly outweigh the costs.

4. Become the successor

At 40 years of age and with a $125mm book giving you credibility, you are in the sweet spot for every advisor 50 and above who needs to identify his own successor. You won’t need to go in search of a senior advisor; they are likely reaching out to you with promises that you will experience exponential growth when you eventually take over their book of business. Given the aging of the advisor population these opportunities abound, but is this type of move right for you? How much of your autonomy must you sacrifice in order to make the partnership work? Is there a certainty that the senior advisor will retire by a certain date? How is the business to operate in the meantime; that is, do you keep your clients and production separate? Will you be introduced to your partner’s clients to ensure a smooth transition and strong retention of assets? What is the impact on your freedom to leave the firm if you should want to in the future? These questions are just some of the considerations that must be addressed before you make this commitment.

5. Going in search of greener pastures

Some next gen advisors may see an opportunity to monetize on the success they have achieved so far by entertaining an offer from another firm and capitalizing on their future growth while they are still in strong growth mode. Alternatively, others at this stage of their careers may be inspired to evolve from employee to business owner and pursue some version of independence. You have sufficient experience and scale to consider building something. With a long runway still ahead of you, it’s important to ask yourself how confident you are in your firm for the future. Will you continue to grow the way you want and to serve your clients as you feel you should? Most advisors recognize that it makes sense to move once in their careers, and the next gen advisor who can be both successor and team leader, and business builder and buyer, is uniquely positioned to consider that one well timed move.

Reaching the Crossroads

So here you are: You have built a successful business, overcoming odds that have made it more challenging than ever before to establish one’s self as an advisor. You’ve proven yourself, earning the right to take charge of what comes next in your business life; don’t allow your firm, a partner, or circumstances to call the next shots. It’s your opportunity to make your own choice and ensure that you choose a path that allows you to build upon your life’s work. Take this time to consider your options carefully, as the path you choose is likely one you will follow through the rest of your career.


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