Eyeing a career move? What you need to know

Advisers continue to be on the move as the industry consolidates and repositions itself for a new era. While many advisers are choosing independence, more are making the less daunting move to another firm within the same channel

Advisers continue to be on the move as the industry consolidates and repositions itself for a new era. While many advisers are choosing independence, more are making the less daunting move to another firm within the same channel.

Some advisers wonder if becoming an entrepreneur is for them.

In today’s world, even advisers who opt to work for a traditional firm have many options to consider — from wirehouses, regional firms and boutiques to quasi-independent models, as well as the independent broker-dealer and registered investment advisory channels. Of the 425 wirehouse advisers who moved in December 2009, 38% moved to other wirehouses, according to InvestmentNews.

With this dazzling array of choices, many advisers turn to recruiters to help them decide whether they should move on and, if so, to where. For some advisers, the frustration level with their current company may reach a boiling point at which they quickly become “do-it-yourselfers” in their job hunt.

Whatever the reason, advisers should resist the temptation to jump ship too quickly. When considering such a life-changing choice, it is far wiser not to make impulsive decisions because of a bad day or excitement over an invitation to lunch from a potential employer. Instead, step back, thoroughly evaluate the situation and take some important steps before expending time and energy meeting with potential suitors.

First, advisers should articulate the challenges in their current position, or what it is that’s causing them to consider moving firms. Be honest and clear: Identify which challenges are likely remediable and which aren’t. Then quantify them, keeping in mind the amount of pain each is causing and how it may affect the ability to conduct or build business.

Then outline criteria for where you would want to be next, asking:

• Where would my clients best be served?

• What are my goals for the next one, five or even 10 years?

• How important is transition money?

• Am I entrepreneurial?

• What am I trying to accomplish from a client perspective?

• What is my succession plan?

• Culturally, where do I think I would best fit in?

This basic exercise is important, because it can help an adviser navigate the recruiting landscape more skillfully. It helps to outline the challenges and determine answers: “What is it I want to achieve by making a move now, and what is the best path toward this goal?”

I favor a “Chinese menu” approach, taking meetings with multiple firms in different channels to help decide the ideal situation. Not all wirehouses, for example, are the same, and life at a wirehouse can be very different from life at a boutique firm. Exploring the different options allows advisers to see how the industry has changed since they first entered the business and to determine if remaining where they work is the best fit. Then, it’s time to streamline the options by narrowing the prospects down to a short list.

Even under the best of circumstances, changing jobs is not easy. While it can seem easier to stay put and maintain the status quo, advisers should remain focused on determining if a move will be accretive for their practice over the long term. Will moving create enough value for your clients, your own professional goals and your bottom-line picture? If so, the short-term disruptions or inconveniences of a move are worth it.

As an adviser narrows the field, he or she can minimize unforeseen downsides by performing due diligence. Enlist the aid of your prospective manager for talking points that outline the benefits of your move for top clients. If the potential firm can’t create a case that an adviser finds sufficiently persuasive, the odds are that clients won’t buy it, either.

Once an adviser does find what seems like truly the “right” fit, the last step is to take two important protective measures before walking out the door. Protocol prohibits advisers from contacting clients before they make a move to a new firm, but many advisers will have conversations with their top clients to solidify the relationship and hypothesize which clients will transition with them. Ensuring that enough clients are satisfied with your performance and will remain clients at your new firm is critical to a successful move.

Finally, it’s important to hire an attorney who specializes in financial services and is well-versed in maneuvering the ins and outs of switching firms. No one can have too many people on their personal “board of directors.” It is a cost, but it will be well worth it in the long run.

Mindy Diamond is president of search firm Diamond Consultants.

For archived columns, go to InvestmentNews.com/practicemanagement.