Time Your Move Around These Factors

There are many factors to take into consideration when you are thinking about making a move, the markets and personal issues are two big ones, but here are some other things to consider.

Your Trailing 12
Recent events have crushed the businesses of many Advisors.  Client assets are down for a myriad of reasons, trading is slow as people are cautious about entering the markets and the firms’ performance in their managed accounts and pooled investment vehicles may be lagging.  All this leads to a lower T12 for you.  Any potential new firm is acquiring your business and, even if your T12 was substantially higher in 2008 or 2007, your business will trade off of your most recent T12 numbers.  If you are not comfortable with this, stay put and rebuild your business before moving.  If, however, you see that the deals are “back-end heavy” and that the opportunity to be paid handsomely as you rebuild your business is great, continue with your due diligence and make a lucrative move.

Changes at Your Current Firm
It is highly likely that your firm has recently been purchased or merged.  It is also likely that your management has made changes and these may not be sitting well with you or your teammates.  Just being uncertain or annoyed is not a reason to leave.  However, having a philosophical difference of opinion with the new management or resenting a lower pay out structure are significant enough to continue moving forward.

Perhaps your firm has recently hired many new Advisors for huge packages.  How will this impact your ability to grow your business and compete for leads, management attention and marketing support?  New hires were promised leads, T&E budgets, and lots of senior management attention to help them bring over their business.  Where you fall within the new hierarchy in your branch has changed and will continue to change.  See the landscape for information on several firms.

Don’t be the Last One Standing
If your branch has seen several defections, you may have been told that you are going to get all those accounts and be key in rebuilding it.  Remember, however, that every new recruit will be promised leads and referrals as well as a lot of management attention.  Only you know your manager and can differentiate between fluff and a sincere promise to reward your loyalty.

Deal Fluctuations
The deals on the Street change from month to month.  What was available 6 months ago may not be available today and depending on the supply and demand of the Advisors, the deal may be much better or much worse.

Many firms have aggressive recruiting goals for the end of 2009 into 2010 following a lull in recruiting for most of 2009.  2008 saw a record number of Advisors moving from one firm to another.  Firms use the size of their deal to manage their hiring.  If they are not so interested in new hires, they lower their deal.  To acquire talent, they pay more.  Each firm also has a different idea as to what a good deal is.  Some lead with big numbers, others have “acceptable” deals and look for the best Advisor for their platform.

Top ticking the deal market is like top ticking a stock sale.  Some will be lucky, some will be smart, most people will trade along the rest of the curve.

Moving purely for money is a big mistake.  But you want to feel good about the financial terms of the deal in consideration of all the factors.

You Need a Change
Changing scenery is invigorating.  If you have been with your current firm for a long time (you define long), you may be feeling stale.  Or, that feeling is comfort.  Only you know if by moving you will be invigorated to take your business to the next level.  Fear of change keeps some Advisors from moving.  If you recognize that you are in a routine that needs a shake up, make the move.

Are you so sure of your surroundings that you fear not being able to replicate them at your new firm?  Your tenure at your current firm brings seniority and a deep knowledge of the firm.  You know who to call for “anything” and who to call to get around “anything.”  You know the security guards and cleaning staff by name and have lunch with your former “classmates” who are now running large portions of the firm.  As a new hire, you will need to forge these relationships.  As a new addition to the branch, your manager will make sure that happens.  Remember, your manager and the senior management of your new firm paid a lot for you to join.  They will do everything they can to introduce you to the “heads of state” and give you the comfort and support for you to succeed.

Only you know if you are connected, or too comfortable and in need of a change.

Personal Factors
You may need to take the equity out of your business.  Big bills come in many forms: kids going to college; you or your kids are getting married; buying a bigger house; supporting elderly or financially strapped family members.  If your motivation is financial, remember that the decision needs to be balanced to include platform and culture also.

Maybe your colleagues are moving and you don’t want to pass up the opportunity.  Everyone hears about big deals for Advisors just to walk across the street.  Who wouldn’t want the same kind of attention and easy money?

Are any of these reasons good or bad to make a move?  Only you can answer those questions.  There are pros and cons to every argument but you need to ask yourself, is now the right time for you.  You need to ask yourself if moving is the right choice.  No one says you have to move firms, ever.  But if you are considering it, you must analyze the market conditions and your own personal reasons.  Weigh the pros and cons of staying and leaving.  And you must be honest with yourself, if you are not 100% sure that most of your clients will come with you and making those back-end hurdles would be a stretch, maybe the up-front portion of your deal isn’t a good enough reason.  It is a long term note, be sure this is the right move.