Over the years I’ve worked with plenty of financial advisors who have expressed interest in making a transition so they can launch or join an RIA. And for all the talent, drive and success any particular advisor may have displayed, sometimes their best strategic option is to simply stay put.
I’m not referring to nerves. In anticipation of such an undertaking, it’s natural for some advisors to have second thoughts or repeatedly validate the risk-reward proposition. I would suggest that behavior is healthy, actually. But there are signals, some overt and some subtle, that should prompt an advisor to stop the process, delay the transition or opt not to engage in at all.
Here are telltale signs your best move is no move:
1. You Don’t Have the Right Supporting Cast
Key personnel are essential to the delivery of your current value proposition. Note I didn’t say what you want to deliver in the future. If there’s a need on your team that is critical to your early success, take the time to find that person before you move.
2. Client Accounts and/or Technology Benefit from Immediate Attention
Typically, an advisor consolidates client accounts and selects new technology post-transition. For those advisors that are able, like an IBD rep for example, consolidating client accounts, transitioning from commission-based products to fee-based alternatives, and evaluating and implementing their own portfolio accounting system in advance of a move can provide productivity gains and make the transition experience smoother.
3. Personal or Financial Stresses are at a High-Water Mark
Personal and financial situations may never be ideal. Enduring a transition will certainly raise the stress level though. Your current personal and financial situation should be able to sustain itself in a tested environment for a minimum of 6-12 months.
4. Integral Parties are Not Prepared
Your reasons for making a transition are legitimate and your plan of execution is worthy. You are prepared yet another party associated with this transition is not. Of highest concern is the firm you are joining or custodian you’ve selected. Ensure all parties vital to your success are ready to go.
5. Misalignment Among Business Philosophy and/or Client Needs
Despite the growing trend of independence, it’s not right for everyone. The way you approach your business, your offering, and the client profiles you serve should thrive as a result of a move. If conceptually you cannot envision net positive gains, you likely won’t realize them in practice either.
6. You Don’t Know Why You’re Making A Change
If you’re not clear in your purpose and plan, take all the time you need. “Change without purpose is chaos.”
7. You Are Inexplicably Uncomfortable
Trust Your Gut. Be clear about your goal and how best to attain it. Evaluate your transition plan and validate with partners and trusted advisors. Revisit your people, value proposition and your probability of success. Identify the source of the anxiety.
8. You Want Out
The most successful moves are typically not about fleeing where you are but seizing enhanced opportunities elsewhere. Be certain you are making a move for lasting and rewarding reasons.
9. You Aren’t Being Honest With Yourself
This applies to one’s aptitude, commitment, offering, opportunity for success, etc. If you question any of these elements, you are better served acknowledging reality and course-correcting.
10. Keeping Up With the Jones’
When advisors make moves it often spurs headlines. The courage, the vision, the monetization – whatever appeals to you – can be contagious. Be sure any move is about YOUR reasons, not somebody else’s.