Even thinking about leaving a Broker Dealer creates anxiety with many financial advisors.
“Should I stay or should I go now? … If I stay there will be trouble - if I go it will be double.”
- The Clash
That may be true for many turning points in your life and it clearly holds true for decisions you make with respect to your B/D too.
The Current B/D Climate:
Recent events with Broker Dealer mergers and acquisitions, accounting mishaps, and alternative product suspensions have created a new form of concern amongst many advisors. Many of these advisors may already have been thinking about their current B/D and the possibility of changing firms.
Concerned calls into our office have increased week over week as the news get worse and worse. A majority of the inquiries have come from advisors who either have been recently acquired through RCAP, have had their favorite products taken off the shelf, or are being forced into lower payouts and higher fees.
Most often, after listening to the specific circumstances, the advice that we have been providing for reps within the RCAP family of broker dealers is to simply wait and hold. While it can be disturbing to read about your new parent company, intentionally or unintentionally, failing to report $23 million or more in accounting losses, on it’s own, it is not a reason to jump ship. There are other reasons to consider, but the recent mishap shouldn’t be the only focus.
As we have advised many of the reps interested in reviewing their options - the pain of staying at their current Broker Dealer must be greater than the pain of leaving the firm.
And while we may find them a better payout and a nice upfront bonus with a different Broker Dealer - money isn’t everything. It’s important to consider and balance the potential of reducing their current Broker Dealer obstacles or challenges with the problems and effort required to transfer all of their client accounts.
Exploring Your Options:
One thing that will always help is to explore your options without commitment. Having a Plan B in your back pocket is always a good thing in the case the situation with your current B/D continue to degrade.
Nobody wants to put their clients and staff through a transition. It’s a lot =of work and it’s never fun. It is unfortunately something that sometimes you must have to do but it is never something you’ll look forward to. That said, if the proverbial writing is on the wall, it’s better to be prepared and fully understand your options.
Here’s a quick check list to begin your process:
- Take your time and work with an independent recruiting firm like RepRecruit to provide the due diligence of looking at 2 or 3 of the best firms based on your business mix and your needs.
- Speak with at least three advisors within those firms - don’t always rely on a B/D’s internal referrals
- Meet their executives and staff at their home office headquarters. Pay attention to office organization and team morale.
- Request a thorough technology demonstration and ensure you are comfortable with the changes you will need to make.
- Pray about it. Talk to trusted advisors like your spouse, staff, clients, and business partners.
- Ask industry wholesalers for feedback about what they think about your current firm and see if other advisors are experiencing the same type of issues.
Not sure if you’re ready to make a move yet?
Here is something we’ve come to learn over the years: most advisors already know if they have to make the change.
Regardless of the reason - payout, fees, culture, compliance, technology - an advisor typically knows when it’s time to move on.
If you’re still wondering if you should make a change, then the answer is likely “no you shouldn’t”. Chances are, you’re not ready yet.
You’ll know you are ready when you realize that you’re spending more time dealing with back office and compliance issues than you are building your book of business. The time to leave is when you realize that your Broker Dealer is costing you money and keeping you from prospecting for new clients. It’s time to leave when the partnership you once felt with them is no longer there and can not be rekindled.
If you feel like you’re there now, then give us a call at RepRecruit, LLC (661) 266-0099 and let us help you understand all your options. There is really no downside to checking things out. The worst case scenario would be to simply come to the understanding that your current Broker Dealer isn’t really that bad after all. And, once again, it never hurts to get a confidential glimpse of what your compensation could look like elsewhere.