Choose a Type of Firm

The Big Four

The biggest firms such as Bank of America, Wells Fargo, Morgan Stanley Smith Barney, and UBS typically have the most lucrative transition packages. Although many Advisors considering a move initially shy away from these larger concerns, the stability of the platforms and commitment to the business end up winning them over. Since these firms are the major acquirers of businesses in our industry, they have enormous amounts of data on how Advisors from virtually all firms perform on their platforms. This information is constantly used to structure deals.

A big appeal for these larger concerns is the ultimate success of your move. Moving firms is always a speculative venture. First, you may not like your new firm, second, your clients may not travel with you, and third, the firm you are joining may exit the business. Joining a big firm essentially negates two of these arguments right off the bat.


Smaller, investment banking firms are sometimes referred to as boutiques. Firms such as Credit Suisse, Deutsche Bank , Jefferies, Goldman & Oppenheimer fall into this category.  Boutiques are enjoying resurgence of late because many have made major commitments to the business. Advisors also feel that if the boutique exits the business, there will be transition package offered. This belief was substantiated by events surrounding Bear Stearns & Lehman, and of course by the retention packages that were offered to Advisors all over the Street. A smaller number of Advisors, closer connections to management, and generally at least some deal flow make boutiques very appealing. With respect to deal structure, boutiques fall between 50% and 75% of what a larger concern may offer.


Regional firms such as Raymond James Associates, Baird & Company and Morgan Keegan are generally high pay-out, well managed entities that Advisors rarely leave. Their product lines tend to be open architecture with little pressure to push any internal product. They typically have larger presences in smaller US cities and offer an appealing alternative to major firms – all the product and payout without feeling lost amongst thousands. While they too offer Advisors deals with up-front and back-end components some of these deals tend to be smaller than both the wire houses and the boutiques. Regionals attract smaller Advisors and rarely compete with lucrative pay packages. In many cases, the firms are the only real game in town – if that town is not a major city.

Private Banks

The banks often have a brokerage side and a private banking side.  The banking side compensates their employees with a salary and discretionary bonus.  They typically do not offer signing bonuses to join.  The appeal is their perceived security of client assets and regular paycheck.  They often will offer compensation guarantees for two years to entice Advisors to join.  Examples of private banks are JP Morgan, Citi Private Bank and Northern Trust.

Asset management firms

These firms generally sell their own proprietary products and asset management capabilities.  Their typical structure is to hire Business Development Officers (BDO) whom they compensate for bringing in new business in the first year. The business is typically handed off to another team of in-house product specialists, reducing the role of the BDO.  Examples of asset management firms are (Highlight) Bessemer Trust and Alliance Bernstein.

Identify the Best Buyer for Your Business

The first thing to understand is the pay structure at the firms you are considering and to see if you can eliminate any of them immediately based on this.  Each category of firm tends to be efficient in the transition package that they will offer you.  Merrill and UBS will be reasonably in-line with one another, but not in-line with say, Bessemer.  Some firms pay a salary/bonus while others will pay commissions.  After that, your current business profile will narrow the options for your business.  Not all firms offer insurance, lending, alternatives (private equity, hedge funds), non-US support, etc.  Some firms allow you to invest client assets only in their products (closed architecture) others have a long list of preapproved third party money managers who you may select for your clients.

Assess the Independent Route

Some Financial Advisors want to take their business private by hanging out their own shingle.  Many firms provide outsourced clearing functionality (Fidelity and Pershing are two).  You, the owner, would find real estate, staff your business, provide client reporting, marketing and sales.

There are some firms that allow you to have your own firm, yet they provide you with the necessary infrastructure.  Hightower Advisors is one that pays an up-front bonus to sign on and has an equity ownership plan.  United Capital also assists in your going independent.