The truth about transition: The grass often is greener

As the financial services industry business faces new, more stringent regulatory challenges, many brokers have entertained the thought of seeking a new business affiliation or exploring a different business model.

Often, though, the consideration process stops there. There’s a widely-held belief that whatever specific problem is addressed by a move, an adviser’s overall situation and his or her level of business and personal satisfaction won’t change much.

Results from the just-released InvestmentNews study of adviser transitions sponsored by TD Ameritrade Institutional find otherwise. In one of the study’s major findings, it discovered that the grass is greener on the other side of a transition, and that most advisers report much greater satisfaction and better business results after a move — particularly after moving to or creating a registered investment advisory firm.

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Of the 419 advisers surveyed who changed affiliations and/or business models since 2014, the study found that advisers becoming RIAs reported the greatest satisfaction among all advisers making a move — 81% reported they were either very satisfied (66.7%), or satisfied (14.8%). While only 3.7% reported being unsatisfied.

By comparison, advisors making moves into other channels, the satisfaction levels drop. 72% reported they were either very satisfied (54.3%) or satisfied (17.1% ) with their decision to move, , dissatisfaction also saw a marginal increase at 4.4% .

So what drives post-move satisfaction? “Simply put, so many things get better for the advisor,.” said Scott Collins, Director of Brokerage Independence at TD Ameritrade Institutional. “Advisers who make the move are more satisfied professionally, because they’re now standing by the side of their clients, and personally, because they can better realize the benefits of growing a business that they control.

Collins added, “And when the advisor is more satisfied, you can be sure their clients will notice the difference, too.”

For advisers who moved to the RIA channel, 76% reported an improved lifestyle and 64% reported an increase in net income. That compares with advisers moving to other channels, 52% of whom experienced an improvement in their lifestyle and 51% an increase in net income.

Advisers who moved to the RIA channel also experienced an overall increase in revenue (52%), an increase in clients (48%), growth in overall assets (44%), improved investment offerings (44%), and improved technology (40%), the survey found.

“Time and again, advisors who move to the independent RIA channel tell us that the grass really is greener on the other side of the transition,” said Collins. “The complaint we most often hear is that advisors who made the move wish they did it sooner.”

If you like to learn more about whether the RIA channel is right for you, download The Myths and Realities of Becoming an RIA or visit TD Ameritrade Institutional’s Exploring Your Independence business evaluator.

TD Ameritrade and Investment News are separate and unaffiliated and each is not responsible for the other’s content. Brokerage services provided by TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. All rights reserved. Used with permission.