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As a financial advisor, you take pride in offering advice that moves your clients closer to what matters most. But when it comes to assessing your own business aspirations, advisors often find themselves adrift. Part of the dissonance is the fact than many advisors have not paused long enough to think through what it is they want for themselves.
Consider this analogy.
When you first meet with a brand-new client, you do not charge straight into allocating their assets and drafting a financial plan. Instead, you guide them through a conversation designed to identify their goals. With those desired outcomes, you implement a strategy that gives them the best chance of achieving their goals. This approach works.
Would it ever make sense to start a conversation about selling or leaving your firm with anything other than your goals? Of course not.
And yet, all too many advisors get on the road to M&A without having checked that important box.
With M&A activity on the rise and advisors in motion across the country, you might be contemplating your next move. I have had countless conversations with advisors. Those who begin with clarity on their goals find themselves most satisfied after the transition. Those who make their decisions based solely on instinct (or the size of the check) end up with regrets that far outweigh any possible upside.
Here are the four pillars of a successful advisor move. These are the four outcomes you should strive to achieve while considering if, when, and with whom to make what will be the most important decision of your career.
1. Competitive payouts and a path to equity
How do you feel about your compensation at your new firm?
You work every day to help your clients reach their financial goals, so you should do the same for yourself. While higher payouts seem appealing, look beyond the dollar amount. Are you going to get the support you need to run your business? What about expert coaching to solve hard practice management challenges?
Look for a landing spot that balances competitive payouts, a path to equity, and an alignment with your best interests. You want fair value for your business, of course. But you deserve the support you need to grow. Compensation is an important part of the equation, but don’t let it be the only deciding factor.
2. Greater growth potential
Is the firm going to provide you with a team, tools, and resources to support growth on your terms?
Many firms offer to match you with local marketing partners or to provide limited social support. I have found that is not enough. You may be great as an advisor, but many great advisors struggle to bring in new leads or don’t understand how to structure their firm properly. That should not prevent you from growing — as long as you don’t let yourself get caught on an island, having to do everything to support your own growth. Access to advisor coaches for practice management support, marketing professionals to help you generate leads, and capital to invest in inorganic growth will enable you to achieve the scale you desire. So, they should be a critical part of the deal.
3. Better quality of life
How much time will you have to spend on the time-intensive, laborious tasks that hold you down?
You can get a technology platform anywhere. There are hundreds of tech solutions. But only a few firms take a step beyond technology to map out investment strategies, compliance workflows, back-office processes, client service, and accountability systems to assign task and project ownership to individuals beyond the advisor.
Practice management consultants don’t just help you derive the most value out of your firm’s platform. They are critical in helping you achieve scale. Find the firm with a team that gives you the quality of life that you deserve.
4. A clear culture fit
Are you happy with the direction that the firm’s management is taking? Do you enjoy spending time with your co-workers?
Culture fit is one of the most underrated, yet most important, ingredients in making a successful move. At the right firm, you can offer the investment and insurance solutions that are right for your clients. You are pleased with the value that the internal team adds, and you find yourself filled with passion and a zest for your career that may have been lacking at your old firm. Your next firm should provide a fulfilling career that allows you to go home every night with a clean conscience.
Let’s come back to where we started.
What are your goals? What is your desired outcome for making a move or selling your firm? Before you decide, consider what the next chapter in your professional life looks like. It is on you to make sure your next career move is your most rewarding one yet.
Jon Dubravac is the chief business development officer at WealthSource, a $1.7B national RIA with 17 offices across the U.S.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.