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Can (Should) This Partnership Be Saved?


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6 questions you and your partner should consider before you hit the fork in the road

When partnerships are formed, they are always done with the best interests of clients in mind. And done right, a partnership can – and should – also provide the perfect environment for synergy, added capacity and expertise, succession and overall success for the advisors. Yet like with any business, the shared mindset the advisors started out with years ago may not be the same today.

Nothing stresses a partnership more than reaching a fork in the road and having to make a joint decision. Those inflection points are almost always what bring to light the differences between folks—not at all unlike a marriage. Two examples come to mind…

What served us so well yesterday…

David, an advisor with 15 years under his belt, formed a partnership with Alex, a young, successful advisor with whom he had a good relationship. An alliance born seven years ago – with the intention of solving for succession and creating an opportunity for Alex to eventually inherit a book of business he was already familiar with – seemed like the perfect union. And it certainly was: together they built a business that grew exponentially in size and service model. But, as David inched closer to his retirement date, he slowed down, contributed less, and became more vested in the status quo. Alex, on the other hand, wanted to evolve and grow the business further by leveraging social media, speaking engagements, expanding client demographics and the like.

With plenty of time left on his career clock, Alex was left ruminating over the following:

“Is this partnership that served us so well to this point still valid and right for the business’ future?”

“Do I continue to stay the course with someone who no longer wants what I want, yet will most likely provide me with a huge succession opportunity down the road?”

This isn’t working for me anymore…

Debbie, a 48 year-old advisor, and 53 year-old Ted, encountered a chasm in their partnership when their firm’s bureaucratic culture got in the way of how they did business. Despite their relative similarity in age, Debbie felt that the toxic, inefficient environment was at DEFCON 1—more than enough to make her say, “It’s time to move on to greener pastures.” And while Ted was rattled by the imperfections of the firm’s culture, it was not enough to leave the relative comfort of the “devil he knows”. Together, they considered their future:

“How do we resolve this gap between us?”

“Do we both stay put, make a move together, or split the partnership and go our separate ways?”

Disparities like these often lead to frustrations—which left unchecked, can not only break-up a partnership, but also destroy a business in the process. These inexorable frustrations are often the catalyst that propels people to investigate the landscape and in doing so, they find that opportunities exist that could increase growth potential, provide better client support, and ultimately provide them with the business life they want.

Yet your partner doesn’t necessarily agree…so now what?

Certainly, it’s rare that differences such as those illustrated above arise suddenly. The fact of the matter is, very few individuals change their goals or behavior overnight. And most often, such differences arise out of a lack of communication—both at the onset of the partnership and throughout the tenure of the relationship.

Just like a marriage, the early years of a partnership reflect the initial values and ideals you shared as a courting couple. Over time, people evolve and life changes—yet those changes often come with some clues. That’s why it’s smart to check in with yourself – and your partner(s) – from time-to-time in order to assess the following:

  1. Why did we form the partnership in the first place?
  2. Are those reasons still valid?
  3. Do we still share the same vision?
  4. Do we continue to see the world the same way: that is, from an investment management and client service perspective?
  5. Is our collective work ethic still complementary?
  6. And, perhaps most importantly: has our evolution as individuals and professionals stayed in sync?

Move forward…together or separately?

Unfortunately, relationships have a way of spinning out of control, leaving individuals sitting on separate sides of a line drawn in the sand. All problems have a solution; the solution, however, may not be perfect for all. For example, if Alex stays the course with David, he may gain the book of business in the end, but may need to come up with another way to build the business of his dreams in the meantime. In Debbie and Ted’s case, if they choose to stay where they are, she’ll be unhappy; if they leave, Ted will likely be unhappy. In either of these two scenarios, if they part ways, they can each solve for their own issues and stay true to their own goals and values…but the cost of that is either having to find a new partner or solving for the things your partner handled in a new way.

Ultimately, it is up to each individual to assess his own needs and define what is best for his future. Then, staying on top of your own goals – and that of your partner(s) – and considering what changes, if any, are required to maintain alignment is key to a healthy partnership. At the end of the day, remember that it’s easier to prevent a fire than to put one out.

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