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By 
September 19, 2024 at 02:05 PM
For many advisors, changing firms can be a colossal blunder for their careers and for their businesses.
Although I’m an executive recruiter paid to help advisors move to new venues, I don’t hesitate to let advisors know when I think they’re best served by remaining where they are.
Here’s how to know if a potential move may not be right for you:
1. Shaky Client Relationships
Do your clients view you as the quarterback of their financial lives? If not, then you should figure out how to bolster those relationships prior to starting plans to make a move.
If clients view your firm as the primary driver of their financial planning and investment programs, then your move is not likely to succeed.
I knew an advisor who opened new accounts by touting the unrivaled prowess of the wirehouse firm he worked for. He regularly talked up the brand. Some years later, when he tried to move those clients elsewhere, the results were catastrophic.
2. Lots of Inherited Accounts
Overloaded with too many inherited accounts?
These accounts stayed with the firm when the previous advisor left, so why are they going to follow you?
Especially if these clients have worked with several advisors at the firm prior to your handling their accounts, it’s highly unlikely they’ll join you at your new firm.
These investors are primarily tethered to the firm and not to their advisor.
3. Too Many Small Accounts
While most advisors focus primarily on households with $250,000 in assets under management and up, some advisors do work with a large number of smaller accounts owned by clients with whom they speak infrequently.
That’s a problematic business to transport.
Advisors with larger accounts that provide a variety of services for and that are owned by clients with whom they communicate regularly are in the catbird seat when advisors switch firms.
4. Non-Transportable Products
Are your client portfolios heavily invested in hedge funds and private equity deals?
Those products may not transfer when you move, and you’ll be forgoing both that chunk of client assets and the revenues that they generate unless you can sell them.
5. Team Issues
Are all of your key team members on board with a potential move? Do you have a team agreement that provides for an amicable division of accounts if you were to exit?
