Top Five Reasons Why Advisors Move

There are many reasons why Advisors look elsewhere: your current firm was just acquired, management changes, or you may just want to see how much you are worth.  Below are some of the reasons why Advisors decide to look elsewhere.

Deals are Going Up
2008 saw record deals offered to First Quintile Advisors.  While those deals dropped significantly following the financial crisis and the ensuing industry consolidation, they are edging back up.  Make no mistake, moving is NOT only about money.  But if you move, be sure it is a financially viable proposition.  Consider that your business is likely to drop 40% or more in the first 12 months following a move, so the deal can be viewed almost as a dislocation allowance.

Monetize Your Business
You and your team have built a lucrative business that returns a generous annuity to you and your partners.  Moving firms (effectively selling your business) provides you with a hefty sum of cash that you can invest, spend, donate or burn (we advocate the first and definitely reject the last).

The Industry is Consolidating
It is likely that your firm merged with, or was sold to, another firm within the past two years.  While your retention package may be impressive at first blush, realize that firms are pricing their deals to cover those packages.  Staying with the new, combined firm may work out for you.  On the other hand, if you are heavily recruited and compensated by a new firm that you choose, you are guaranteed to be lauded as the best new hire in the branch.  Your new manager wants you to succeed to prove that he made a good hire.

If you have concerns about the future of your current firm, your place within the new organization, or see Advisors and management leaving, now is the time to consider making a move.  The most important consideration is to stay in control of your destiny.  If your firm was indeed acquired, understand that you are moving firms.  Even though everything looks the same, it’s not; everything will change within a year.

Your Current Contract is Up
While firms don’t like “jumpers” who move at the end of each contract, if yours is expiring shortly, it may be worth your while to evaluate the competition.  Ten years ago Advisors used to move on average once every 9 ½ years.  Today, the number has dropped 30% to 5 ½ years.  Firms are no longer loyal to their Advisors, and Advisors are returning the favor.

Internal Issues Do Not Go Away
Oftentimes an issue that starts out as a nuisance grows intolerable over time.  Product weaknesses may have been acceptable at one time but have become limiting to your business growth.  Client reporting is a big issue.  Senior management is no longer asking your opinion about anything.  Your firm may be too often in the press (and it is not for exceeding earnings expectations).  Or perhaps you are one of the last holdouts in your office.  Yes, you can put a positive spin on these, such as, “Advisors who leave may give you opportunity to seize their accounts”, but that is likely never to have been your business plan.  You can put a positive spin on these internal issues or you can find a better alternative for your business.