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What Happens When Partners No Longer Share the Same Vision


What Happens When Partners No Longer Share the Same Vision

What happens when partners no longer share the same vision? Does a lack of consensus about the future mean the end of the relationship?

Advisors are seeing more value in partnerships than ever before, acknowledging that it has become extremely challenging to be a sole practitioner and motivating many to join forces with other like-minded professionals. They are more likely to be managing a client’s entire financial life and are expected to be experts on all fronts. And with the nature of the business being heavily relationship-based, advisors must devote a significant amount of time to being in front of clients. Those that successfully enter into partnerships, however, quickly discover that maintaining them has its own challenges.

At a Crossroads

Take, for example, partners whose business is at a major crossroads, where they must decide in which direction to take the business next. In this case, the strength of even the best of partnerships is likely to be tested.

Advisors are almost universally grappling with the desire for more control from their firms, and this phenomenon is forcing many advisors to reevaluate whether they’re still at the best place. With more legitimate high-end options from which to choose, it’s more likely that even longstanding partners may have differing views.

Differing Life-Stages

Partners, especially those at different stages in their professional lives, may be motivated by vastly different priorities. When one partner is contemplating retirement, teams may disagree over the best approach to creating continuity. More firms today offer some form of “sunset plan” which allows a retiring advisor to monetize to some degree. But when a retiring advisor signs on for this, his partner is effectively tied there as well, at least for the next 5 or so years.

Can This Partnership be Saved?

Partnerships have certainly broken up in the midst of facing these choices. Yet partners committed to remaining aligned need to look for creative solutions to meet everyone’s needs. Don and Rob, partners for 15 years in a successful and growing practice, are a great example. Over the past 5 years, they talked enthusiastically about leaving their traditional firm to launch an independent high-end wealth management business. They both loved the idea of creating a client-focused practice and were committed to building equity in something they owned, controlled and could ultimately sell.

However, in recent months, Don has begun to think more about retiring than about building something, and his firm’s retirement plan – while far from ideal – is starting to look more attractive. Rob, while not prepared to abandon his vision of independence, won’t consider leaving Don behind. When Don first shared his reluctance to make a change at this juncture of his career, Rob assumed that he would have to postpone, perhaps indefinitely, his pursuit of becoming an independent business owner. However, they were willing to think out of the box. After some soul searching and consulting with industry experts, they have decided to explore options that support their making a move together to an independent model, while still allowing Don to retire and get paid out under terms he’s comfortable with. For Don and Rob, preserving the partnership was the first priority, and with some creativity and compromise, they are committed to finding a solution that meets each of their goals.

While partnerships are formed from financial advisors who share values and vision, it is in that same space that they can often go astray. Just as in any relationship, individuals change. It is also in that same space that creative solutions emerge to create opportunities that can benefit the partners and the clients. Regular pulse checks and open dialog amongst partners can help to continually align their vision and values and assess any changes so that plans are made before they create strain on the relationship or business.

And no matter how you look at it, it’s a relationship business; from a client, as well as business partner perspective.

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